ECON 233 – Introduction to Game Theory

Quiz 1

NAME:

ROLL NO.:

Date: 15th June 2017

Total Marks: 28
Time: 40 minutes

For this quiz only you may ignore the existence of mixed strategies and talk only in terms of pure
strategies.

1. State whether the following statements are True or False and explain your answer. (6 marks)

a. All Pure Strategy Nash Equilibria must also be Dominant Strategy Equilibria.

b. In a finite two player game, it is possible that an undominated strategy is not a best response for
any belief.
c. Nash Equilibrium strategies will always survive IEDS (strict).
2. For the following game

L M R
A 2,2 3,0 4,0
B 3,3 2,0 1,0
C 1,3 5,5 0,2
D 1,1 1,1 2,3

a. State whether there is a Dominant Strategy Equilibrium. (1 mark)

b. Iteratively eliminate all strictly dominated strategies; state the eliminated strategy, it’s
reason for elimination and the reduced game for each elimination. (5 marks)
c. State whether it is dominance solvable using IESDS. (1 mark)
d. What are the rationalizable strategies? (1 mark)
e. State the Nash Equilibrium (if it exists) (2 marks)
f.
3. For the following 3-player game player 1 selects a or b, player 2 chooses columns x or y, and
player 3 selects A or B.
Player 3
A B

Player 2 Player 2

x y x y
Player 1 Player 1
a 4,1,0 3,1,2 a 2,5,1 2,4,1
b 1,3,2 2,4,1 b 3,0,0 2,1,5

a. State the strategy space of for each player, Si for i=1,2,3 (1.5 marks)
b. What is u2 (b , y , A )? (1 mark)
c. Draw the extensive form of this game. (2.5 marks)
d. Find the Pure Strategy Nash Equilibria. (4 marks)
4. Answer ANY ONE of the following questions about The Trap by Adam Curtis (3 marks)
a. Describe the Prisoners dilemma scenario explained in the documentary.
b. What was the argument presented by Public Choice Theorists about government
officials and how did it link to game theory?
c. What was the experiment done in an attempt to discredit the field of psychiatry?