Game Theory Final Exam-ANSWERS A+GRADED

Game Theory Final Exam-ANSWERS A+GRADED Uncertainty - ANSWER-Players of different types Cheap Talk - ANSWER-Direct communication, but it's useless because you can signal something and choose something else Basic Signaling Game - ANSWER-All P1 strats, signal something, choose something else all combos. Same for P2. Separating Equilibrium Game - ANSWER-For C students: Offered lower salary must be greater than or equal too the salary for A students minus the disutility cost per course * x. For A students: Offered higher salary must be greater than or equal to the C student salary minus A student disutility cost * x courses. This model favors C students because they don't have to do anything to get 100k. Anyone with x course more than the C student x value becomes an A student. If A student right side isn't less than offered salary, A student has no incentive to take hard classes. Pooling equilibrium - ANSWER-all player types do same activity, whereas separating is all types do different activities Manager Salary Game - ANSWER-1. Multiple project success profits by probability of success for bad work = extra profit for manager for hard work. 2. This extra profit value must be greater than the difference between the salaries that the manager demands for bad or hard work. 3. So, the total manager compensation should equal some flat salary payment + some bonus with probability of success for hard work or bad work as coefficient. 4. Hard work term minus bad work term must be greater than difference between manager demanded salaries, so solve for the bonus ( the salaries cancel). 5. Now plug the bonus back into high effort term = high manager demanded salary and solve for s. NOTE: This s could be negative! This means the manager buys in s dollars and expects that huge bonus if they work hard. How to Date - ANSWER-*Out of n possible partners, date n/e of them, then take he next one better than the best of n/e. *People don't have objective dating standards. Their standards are determined by the market. ex: You prefer A to B, but if no A available, you take B. Gambler's Fallacy - ANSWER-"It's due." You see black black black, you think it's about time there's a red, so you pick red. Hot-hand Fallacy - ANSWER-Opposite of gambler's. You see black black black, you're like welp it'll probably be black. So you pick black.