I. Two cars are meeting at an intersection and want to proceed as indicated by the arrows in the following Figure:

Each Driver can proceed or move. If both proceed, there is an accident. A would have a payoff of 100 in this case, and B a payoff of 1.000 (since B would be made responsible for the accident, since A has the right of way). If one yields and the other proceeds, the one yielding has a payoff of 5, and the other one of 5. If both yield, it takes a little longer until they can proceed, so both have a payoff of 10. Analyze this simultaneous game, draw the payoff bimatrix, and find the Nash equilibrium.

II. In the movie “A Beautiful Mind” there is a scene in which John Nash (Russell Crowe) and his friends are in a Pub and a group of girls walked into the place. At that point, Nash associated getting to meet the girls with game theory under oligopoly competition. If Nash and his friends are oligopolistic firms and the girls are consumers, use economic terms to translate the scene in terms of competition for an oligopoly market.

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Microeconomics Final Evaluation Spring 2018 Two cars are meeting at an intersection and want to proceed as indicated by the arrows in the following Figure: Each Driver can proceed or move. If both proceed, there is an accident. A would have a payoff of 100 in this case, and B a payoff of 1.000 (since B would be made responsible for the accident, since A has the right of way). If one yields and the other proceeds, the one yielding has a payoff of 5, and the other one of 5. If both yield, it takes a little longer until they can proceed, so both have a payoff of 10. Analyze this simultaneous game, draw the payoff bimatrix, and find the Nash equilibrium. In the movie “A Beautiful Mind” there is a scene in which John Nash (Russell Crowe) and his friends are in a Pub and a group of girls walked into the place. At that point, Nash associated getting to meet the girls with game theory under oligopoly competition. If Nash and his friends are oligopolistic firms and the girls are consumers, use economic terms to translate the scene in terms of competition for an oligopoly market.

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Microeconomic….doc