 
Summary: Homework 5
1. Problem 4, page 103.
2. Problem 7 page 115.
3. Problem 7, page 126.
4. For game 4.19 of page 121, assume 0 < m < 20 and 0 < e < 10. Find a strategy profile that is
subgame perfect. Find another profile which is a Nash equilibrium, but not a subgame perfect
equilibrium.
5. In the game below, find all subgameperfect Nash equilibria (there are two), identify the path
through the tree that each one represents, and the expected utilities of each player. Does the game have
any Nash equilibria that are not subgame perfect?
6. Problem 1 page 149
7. Problem 7, page 161
8. Consider the example of hiring an individual based on 11 papers (from the chapter 5 notes).
a. What is the effect of having few papers (say 7) on which to base the decision?
b. What is the effect of cost of reviewing? Find a formula to relate the cost of reviewing and a
probability of a correct decision (from guessing) that gives incentive to actually reviewing the
paper?
c. The original example suggests that a person is better off not reviewing the paper. What is the
solution?
d. A sequential mechanism is a device to elicit desirable behavior in a sequential game. How
