ECON (MGEC) 333 Game Theory and Strategy Final Examination Solutions with Questions 2006

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Consider the extensive form game given by the following game tree: Write down the strategic form of this game (The bimatrix representation is sufficient). Find all pure strategy Nash equilibria Fin... d the set of pure strategy subgame perfect equilibria of the game. (25pts.) Consider the following game between a worker and a firm. The worker chooses to expend effort (E) or not (N). If he chooses N the game ends and both players receive a payoff of zero. If he chooses to expend effort, the value of his output is y, and the firm chooses how much to pay the worker, w ∈ [0, y]. The cost of effort is c and y > c > 0. Therefore, if the worker chooses to expend effort and the firm pays him a wage equal to w, the payof [Show More]

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