"Inside  every small problem is a large problem struggling to get out."

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Respond to the question: Nash Equilibriumetc?

 11/19/2017 07:08 AM by Josh; Picasso
There are 6 NE in total, 4 pure and 2 mixed. For (seller,buyer), the pure NE are (1,1), (2,2), (3,1) and (3,3), which you can easily check by making a table and underlining best responses. As for the mixed NE, the buyer should also

 11/19/2017 06:40 AM by Josh; Picasso
There are 6 NE in total, 4 pure and 2 mixed. For (seller,buyer), the pure NE are (1,1), (2,2), (3,1) and (3,3), which you can easily check by making a table and underlining best responses. As for the mixed NE, the buyer should also [View full text and thread]

 09/28/2017 09:26 AM by Tobi; Nash Equilibrium_etc.
Hey,
Would be amazing if somebody could solve this problem for me. I have no clue, to be honest. Here it is:

A seller and a buyer try to agree on the price of a Picasso painting. In the
rest of this exercsie, all the values and payoffs are in millions of dollars (and
I will omit mentioning it). The value of the Picasso for the seller is 1, while
for the buyer is 3. Suppose the negotiation occurs as follows: both seller
and buyer simultaneously propose a price pS, pB ∈ {1, 2, 3}. If the price
offered by the buyer is at least as high as the one required by the seller, the
transaction takes place and the painting changes hands at the average of the
two proposed prices.
1. (5 points) Consider this situation as a strategic game and write down
the associated payoff matrix.
2. (10 points) Find the set of all Nash equilibria in pure strategies.
3. (5 points) Show that all Nash equilibria in pure strategies are (Pareto)
efficient.
4. (10 points) Construct an inefficient Nash equilibrium allowing for mixed
strategies.

Thank you ! [Manage messages]

 09/28/2017 09:26 AM by Tobi; Nash Equilibrium_etc.
Hey, Would be amazing if somebody could solve this problem for me. I have no clue, to be honest. Here it is: A seller and a buyer try to agree on the price of a Picasso painting. In the rest of this exercsie, all the values and [View full text and thread]

 09/27/2017 09:08 AM by Tobi; Nash Equilibrium_etc.
Hey, Would be amazing if somebody could solve this problem for me. I have no clue, to be honest. Here it is: A seller and a buyer try to agree on the price of a Picasso painting. In the rest of this exercsie, all the values and [View full text and thread]