Game Theory Response

With reference to the game theory strategies for the four games(SH, CO, HD, and PD):

1. Which, if any, of the 4 games exhibits strategic dominance, and for any that do, what is the dominant strategy in each case?
2. Which, if any, of the 4 games exhibits strategic complementarity or anticomplementarity?
3. In light of the empirical outcomes of the games played, which conditions seem to be more conducive to realizing the “cooperative” outcome CC? Which conditions seem to be more conducive to realizing asymmetric outcomes CD or DC?
4. Suggest some real-world situations corresponding to each of the 4 game scenarios you played (other than the examples given in the previous handout; see attachment).
5. Suppose that “payoffs” are interpreted as “player utility levels.” In each of the 4 games, which outcomes, if any, are optimal based on the classical utilitarian standard? Which outcomes are Pareto optimal?
6. For each game, what strategy combinations satisfy the minimum-payoff standard if that minimum is set at 2? At 3?
7. If we agree with Pareto that interpersonal comparisons of utility are not possible, what other interpretation of “payoffs” might justify the use of distribution-based standards for judging the desirability of social outcomes? How might the positive analysis of social outcomes in particular games be compromised by this alternative interpretation? Explain.

Sample Solution