ECON N110 MIDTERM 2 EXAM QUESTIONS AND ANSWERS WITH COMPLETE SOLUTIONS GRADED A++

ECON N110 MIDTERM 2 EXAM QUESTIONS AND ANSWERS WITH COMPLETE SOLUTIONS GRADED A++ Pure strategy a strategy which does not involve any randomization Mixed strategy Probability distribution over a player's pure strategies A game may or may not have a pure strategy Nash Equilibrium True Every finite game has a mixed strategies nash equilibrium True Each decision node represents one of that player's choice True All decision nodes and terminal nodes have a predecessor, but the root node does NOT True A node canNOT be a predecessor of itself True A predecessor's predecessor is a predecessor True Predecessor's can be ranked True For any two nodes if one is not the predecessor of the other then there should be a common predecessor True Information Set a set of nodes that the decision maker cannot differentiate Perfect information When a player has to make a choice, they know the entire history of choices made by the other players An extensive form game with exactly one node in each information set Player whose turn it is knows what node they are at and how they got there Perfect information game has no simultaneous moves True SPNE at each decision node it assigns an action that maximizes that player's payoff relies on the assumption of sequential rationality and that rationality is common