Name: Rana Ashraf Mohamed Ahmed

ID: 20201067

Assignment (1)

Q1) Mark and John, play a simultaneous-move game. Each

player can choose to play or not to play. If both players
choose to play, each earns a payoff of $50 If both players
choose not to play, each earns a payoff of $10 If player 1
chooses play and player 2 chooses don’t play, then player
1 earns $0 and player 2 earns $650 If player 1 chooses not
to play and player 2 chooses to play, then player 1 earns
$650 and player 2 earns $0 Write the above game in normal
form.
SOL
1. Payoff table:
John (2)
Play Not
Mark (1)
Play 500,500 0,650
Not 650,0 100,100
2. I = {1,2}
3. S1={Play,Not}, S2={Play,Not}
4. S={(Play,Play),(Play,Not),(Not,Play),(Not,Not)}
5. π(Play,Play)=(500,500)
π(Play,Not)=(0,650)
π(Not,Play)=(650,0)
π(Not,Not)=(100,100)

1
Name: Rana Ashraf Mohamed Ahmed
ID: 20201067

Q2) Find the strictly dominant strategy:

Player (2)
Buy Sell Hold
Buy 3,3 2,2 1,1
Player (1) Sell 2,2 1,1 0,8
Hold 1,1 8,0 0,0

SOL
1. Player (1): Buy strictly dominates sell.
Player (2)
Buy Hold
Buy 3,3 1,1
Player (1) Hold 1,1 0,0

2. Player (2): Buy strictly dominates Hold.

Player (2)
Buy
Player (1)
Buy 3,3

The game is dominance-solvable with a strategy profile

(Sell,Sell).

2
Name: Rana Ashraf Mohamed Ahmed
ID: 20201067

Q3)
Player (2)
N O T
N 0,1 6,3 2,2
Player (1) O 1,2 5,4 4,3
T 2,3 3,5 3,4

A. Given the below payoff matrix Define:

1. the set of players.
2. strategy space of each agent.
3. strategy space of the game.
4. payoff for each strategy profile.
B. Find the strictly dominated strategy.
SOL
A.
1. I = {1,2}
2. S1={N,O,T}, S2={N,O,T}
3. S={(N,N),(N,O),(N,T),(O,N),(O,O),(O,T),(T,N),(T,O),(T,T)}
4. π(N,N)=(0,1)
π(N,O)=(6,3)
π(N,T)=(2,2)
π(O,N)=(1,2)
π(O,O)=(5,4)
π(O,T)=(4,3)
π(T,N)=(2,3)
π(T,O)=(3,5)
π(T,T)=(3,4)
B.
1. Player (1) : No strictly dominant strategy.
2. Player (2) : O strictly dominates N.

3
Name: Rana Ashraf Mohamed Ahmed
ID: 20201067

Player (2)
O T
O 5,4 4,3
Player (1) T 3,5 3,4

3. Player (1) : O strictly dominates T.

Player (2)
O
Player (1)
O 5,4
The game is dominance-solvable with a strategy profile
(O,O).

4
Name: Rana Ashraf Mohamed Ahmed
ID: 20201067

Q4) There are two stores, each of whom chooses a position

from ten spots along the street: spot 1, 2, 3,· · ·,1. The ten spots are lined
up and separated 100 metres from each other. The consumers are
uniformly distributed across these ten spots (i.e.,consumers are located
on the spots, not the segment between any two spots.). Consumers buy
from the store whose spot is closest to theirs. If the two stores are
equidistant from a given spot, the consumers at that position split their
consumption equally. The aim of the stores is to maximise their share of
the total ice-cream consumption. Is there any dominant strategy? If so,
spell out explicitly how one strategy is dominated by another strategy.
SOL
(2)

1 2 3 4 5 6 7 8 9 10
1 1 1 1 1 1 1 1 1 1

1 50,50 10,90 15,85 20,80 25,75 30,70 35,65 40,60 45,55 50,50
1

2 90,10 50,50 20,80 25,75 30,70 35,65 40,60 45,55 50,50 55,45
1

3 85,15 80,20 50,50 30,70 35,65 40,60 45,55 50,50 55,45 60,40
1

4 80,20 75,25 70,30 50,50 40,60 45,55 50,50 55,45 60,40 65,35
1
(1)
5 75,25 70,30 65,35 60,40 50,50 50,50 55,45 60,40 65,35 70,30
1

6 70,30 65,30 60,40 55,54 50,50 50,50 60,40 65,35 70,30 75,25
1

7 65,35 60,40 55,45 50,50 45,55 40,60 50,50 70,30 75,25 80,20
1

8 60,40 55,45 50,50 45,55 40,60 35,65 30,70 50,50 80,20 85,15
1

9 55,45 50,50 45,55 40,60 35,65 30,70 25,75 20,80 50,50 90,10
1

10 50,50 45,55 40,60 35,.65 30,70 25,75 20,80 15,85 10,90 50,50
1

5
Name: Rana Ashraf Mohamed Ahmed
ID: 20201067

1. Player (1): 9 strictly dominates 10.

(2)

1 2 3 4 5 6 7 8 9

1 50,50 10,90 15,85 20,80 25,75 30,70 35,65 40,60 45,55

2 90,10 50,50 20,80 25,75 30,70 35,65 40,60 45,55 50,50

3 85,15 80,20 50,50 30,70 35,65 40,60 45,55 50,50 55,45

4 80,20 75,25 70,30 50,50 40,60 45,55 50,50 55,45 60,40

5 75,25 70,30 65,35 60,40 50,50 50,50 55,45 60,40 65,35

(1)

6 70,30 65,30 60,40 55,54 50,50 50,50 60,40 65,35 70,30

7 65,35 60,40 55,45 50,50 45,55 40,60 50,50 70,30 75,25

8 60,40 55,45 50,50 45,55 40,60 35,65 30,70 50,50 80,20

9 55,45 50,50 45,55 40,60 35,65 30,70 25,75 20,80 50,50

2. Player (2): 8 strictly dominates 9.

(2)

1 2 3 4 5 6 7 8

1 50,50 10,90 15,85 20,80 25,75 30,70 35,65 40,60

2 90,10 50,50 20,80 25,75 30,70 35,65 40,60 45,55

3 85,15 80,20 50,50 30,70 35,65 40,60 45,55 50,50

4 80,20 75,25 70,30 50,50 40,60 45,55 50,50 55,45

(1) 75,25 70,30 65,35 60,40 50,50 50,50 55,45 60,40

5

6 70,30 65,30 60,40 55,54 50,50 50,50 60,40 65,35

7 65,35 60,40 55,45 50,50 45,55 40,60 50,50 70,30

8 60,40 55,45 50,50 45,55 40,60 35,65 30,70 50,50

6
Name: Rana Ashraf Mohamed Ahmed
ID: 20201067

3. Player (1) : 7 strictly dominates 8.

(2)

1 2 3 4 5 6 7

1 50,50 10,90 15,85 20,80 25,75 30,70 35,65

2 90,10 50,50 20,80 25,75 30,70 35,65 40,60

3 85,15 80,20 50,50 30,70 35,65 40,60 45,55

(1) 4 80,20 75,25 70,30 50,50 40,60 45,55 50,50

5 75,25 70,30 65,35 60,40 50,50 50,50 55,45

6 70,30 65,30 60,40 55,54 50,50 50,50 60,40

7 65,35 60,40 55,45 50,50 45,55 40,60 50,50

4. Player (2) : 7 strictly dominates 1

(2)

2 3 4 5 6 7

2 50,50 20,80 25,75 30,70 35,65 40,60

3 80,20 50,50 30,70 35,65 40,60 45,55

4 75,25 70,30 50,50 40,60 45,55 50,50

(1) 5 70,30 65,35 60,40 50,50 50,50 55,45

6 65,30 60,40 55,54 50,50 50,50 60,40

7 60,40 55,45 50,50 45,55 40,60 50,50

7
Name: Rana Ashraf Mohamed Ahmed
ID: 20201067

5. Player (1) : 6 strictly dominates 7.

(2)

2 3 4 5 6

2 50,50 20,80 25,75 30,70 35,65

3 80,20 50,50 30,70 35,65 40,60

4 75,25 70,30 50,50 40,60 45,55

(1)

5 70,30 65,35 60,40 50,50 50,50

6 65,30 60,40 55,54 50,50 50,50

6. Player (2) : 3 strictly dominates 2.

(2)

3 4 5 6

3 50,50 30,70 35,65 40,60

(1) 4 70,30 50,50 40,60 45,55

5 65,35 60,40 50,50 50,50

6 60,40 55,54 50,50 50,50

7. Player (1) : 6 strictly dominates 3.

(2)

4 5 6

4 50,50 40,60 45,55

(1) 5 60,40 50,50 50,50

6 55,54 50,50 50,50

8
Name: Rana Ashraf Mohamed Ahmed
ID: 20201067

8. Player (2) : 5 strictly dominates 4.

(2)

5 6

5 50,50 50,50
(1)
6 50,50 50,50

Equilibrium.