ECON 703 Midterm: 703_prelim
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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: (45 points) consider the following normal form game played by bruce and sheila: What are all the pure and mixed strategy nash equilibria of this game. Consider now the once repeated game, with players observing rst period play before making second period choices. Payo s in the repeated game are the sum of payo s in the two periods. (b) describe the information sets and pure strategies of the extensive form of the repeated game. Describe a pure strategy nash equilibrium of the once repeated game in which bruce plays t in the rst period.
