ECON 703 Midterm: 703_aug2014
Document Summary
The exam is worth 120 points in total. Start each question in a new book, clearly labeled. Fully justify all answers and show all work (in particular, describing an equilibrium means providing a full description of the strategy pro le and proving that it has the desired properties). If you need to make additional assumptions, state them clearly. Good luck: (30 points) consider the following simultaneous move game played by bruce and sheila (with. Bruce being the row player, and sheila the column player): Only bruce knows the value of x, which is either 4 or 8; sheila assigns equal probability to the two values. (a) describe the incomplete information game (i. e. , describe the strategies and payo s). [5 points] (b) describe all pure and mixed equilibria of this game. 1: (30 points) a seller can either exert e ort (h) or not (l) in the production of a good.
