Economics 473/673, Spring 2020 Development Microeconomics Prof. Econ 463/673 Problem Set #1 1. Suppose we have the following two-player game with strategy set for both players S, = S2= A , B : Player 2 A B zx W A Player 1 X1 y y Z2 B W Z1 Describe which type of canonical game is given by each of the following payoff conditions (where i = 1,2) , tell how many pure-strategy Nash equilibria exist in the game, and Pareto-rank multiple Nash equilibria when there is more than one equilibrium in a game: a ) w > x; , Z ,> y, Z; w>, Z;>y, X2> Z2,Z1>X1 (the stag hunt) 2 nash equilibria c) X,> W, Z;> y, X2> Z2, X1>Z1 (the stag hunt) 2 nash equilibria d) w>x;, y>z;, w>yx;>Z; (The prisoners's dilemma game) 1 nash equilibria e ) X 1 > W , Z 1>y, W>X2, Z2 > y, Z;