MBA (Business Economics)-IV Sem.

– May,2021
Business Economics – Course
Paper Name: Topics in Game Theory & Paper Code: 424802303

Time: 3+1 hours Maximum Marks: 70

Attempt any 4 questions

Q1. Consider the following Signalling Game.

Find the pooled and separating equilibrium?

Q2. Consider the following extensive game with imperfect information

Find the Perfect Bayesian Nash Equilibrium (PBNE) and check for sequential
rationality and consistency of beliefs.
Q3. Consider the game when the inverse demand function is given by P ( Q )=α −Q for
Q ≤ α and P ( Q )=0 for Q>α . For values of c H and c L close enough that there is Nash
equilibrium in which all outputs are positive, find this equilibrium. The information
structure of the game is as follows:

Q4. Consider the following extensive game

First identify and show the sub games and then find the Sub game Perfect Nash
Equilibrium

Q5. Given the following Stage Game:

Player 2
C D
Player C 30,30 15,50
1 D 50,15 20,20

Find the value of the discounting factor in order to have cooperation between the two
players. Consider the following strategies when the game is repeated infinite period of
times. (GT=Grim Trigger strategy, TFT=Tit for Tat Strategy, TFTD=Tit for Tat
Strategy starting from D, ALT=Alternate D, C, D, C……)

First: (GT,GT)
Second: (TFT, ALT) , is it rational for the Player 1 to deviate to play d always.
Third: (TFTD, TFT), is it rational for the Player 1 to deviate to Play TFT.
Q6a. Consider the three player game with the payoffs given:

Player 2 Player 2 Player 2

Player 1

Player 1
) ) ) ) ) )
(2,0,0 (0,0,0 (0,0,0 (4,4,4 (0,2,0 (0,0,6
B B B
) ) ) ) ) )

A B C

Player 1 choose one of the two rows, Player 2 chooses one of the two columns &
Player 3 chooses one of the three tables (A, B,C)

Find the pure strategy equilibrium in this game?

b. Prove that [( 3
4
1
4 )
2 1
]
, 0 , (0 , , ) is a not a Mixed Strategy Nash Equilibrium for the
3 3

following strategic game.

Player 2
L C R
T (5,4) (6,6) (2,2)
Player 1

M (6,6) (0,4) (4,9)