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Player 2 W X A 2,5 3,4 1,4 3,2 Player 1 3,2 4.3 5,1 3,2 1,1 2,1 4,2 2,4 2,3 4,2 3,1 a. Identify strategies

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Player 2 W X A 2,5 3,4 1,4 3,2 Player 1 3,2 4.3 5,1 3,2 1,1 2,1 4,2 2,4 2,3 4,2 3,1 a. Identify strategies that are strictly dominated in this game. Your answer should explain which strategy weakly dominates the identified strategy. [2 marks] b. Kentify strategies that are weakly dominated in this game. Your answer should explain which strategy weakly dominates the identified strategy. [4 marks] c. Show that in the presence of weakly dominated strategies, the order of elimination of dominated strategies leads to different solutions to the game. [9 marks] Question 2 Two workers in a pottery factory are to be evaluated on their performance. The manager instructs them that the worker who produces the highest output will receive rank 1 (master) and the one with lower output will receive rank 2 (novice). Worker I's cutput equals n + 2, where a is the amount of effort that worker 1 exerts in production. Worker 2's output equals 2 +0.5, where x2 is the amount of effort exerted by worker 2. It is implicitly assumed that worker 1 is the more productive worker of the two, in that, if the amount of effort is held fixed, worker I has a higher output by an amount 2. Assume that x and x2 can take any value in {0.1,2,3,4.5). The payoff to worker i is 10 - x, if she is a master and 6 - x, if she is a novice (where / =1, 2). Find strategies that survive the iterative elimination of strictly and weakly dominated strategies. [ In your answer, eliminate both weakly and strictly dominated strategies where possible]. [20 marks] 1

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