PS135:

Game
Theory
in
the
Social
Sciences

Quiz
1

UC
Berkeley

Department
of
Political
Science

Summer
2017

Professor
Sean
Gailmard

Scores
are
out
of
100
points
possible.
Each
numbered
question

has
equal
weight
toward
that
total.
Each
lettered
subpart

has
equal
weight
in
the
point
value
of
its
question.

1. (a) What is a Nash equilibrium in a game?

(b) Why do game theorists focus on Nash equilibrium in the analysis
of games?
(c) True or false, and explain: analysis of games by Nash equilibrium
generally conrms the logic of the invisible hand, that decen
tralized rational choice by individual agents in society leads to
both the greatest possible good for each of those individuals, and
the greatest possible good for the group as a whole.

2. Consider a 2 player game where each player has two possible actions.

(a) If one of the players has a dominant strategy, must the game have
a Nash equilibrium in pure strategies? (I.e., must it have at least
one NE in pure strategies?)
(b) If one of the players has a dominant strategy, is it possible for the
game to have more than one Nash equilibrium in pure strategies?
(c) If both players have a dominant strategy, is it possible for the
game to have more than one Nash equilibrium?

3. (a) Two regional paramilitary groups of roughly equal strength are

contesting each other for power in a country with a failed central
government. Each group can either attack the other group or
keep the peace. If they both keep the peace, they share control
and each obtain 8 jollies from control of natural resource wealth.
If one attacks and the other is peaceful, the attacker destroys some
infrastructure but is able to steal some of the other groups wealth;

 the attacker obtains 2 extra jollies and the victim loses 3 jollies
compared to mutual peace. If the groups attack each other, they
destroy a lot of resources and claim only 4 jollies each. What is
the strategic form of this game? What is the (pure strategy) Nash
equilibrium?
(b) Suppose that an international peacekeeping force threatens to im
pose sanctions for ghting. If there is any ghting at all (i.e. either
group attacks the other, or they attack each other), the peace-
keeper cannot determine which side started it, so it threatens
to impose sanctions costing each group 5 jollies in any outcome
other than mutual peace. (The sanctions are subtracted from the
jollies obtained in the previous strategic form.) Now what does
the strategic form look like? Would you expect the sanctions plan
to be eective?

4. Two boats routinely pass through a rocky harbor in darkness and dam
age their hulls on the rocks. The boat owners have no government or
cooperative institution to coordinate their actions, but each boat owner
can decide to build a light house by itself (independently of the other
owner) or not. If neither owner builds a light house, both owners re
ceive 0 jollies. If anyone builds a light house, both owners gain 2 jollies
from reduced expense on boat repairs (the light is visible to both boats,
whether that owner built the light house or not). But if an owner builds
a light house, that owner gives up 1 jolly from the expense.

(a) Draw the strategic form.

(b) Identify all (pure strategy) Nash equilibria.
(c) Do the boat owners need a government to coerce them to coordi
nate on the outcome that is best for them collectively, or do the
players own strategic incentives lead them to maximize the sum
total of their jollies anyway?

5. Two brothers are playing with toys and can either squabble over them
or chill out. If both chill out, they each have great time and get 74
jollies. If either boy squabbles, a ght breaks out. If one squabbles and
the other chills out, the squabbler takes the toys of the chiller. In that
case, there is less time to play, but the squabbler gets extra toys and
the chiller has fewer. This confers 38 jollies on the squabbler and -10

jollies on the chiller. If they both squabble, they dont have any time
to play, so they get 0 jollies.

(a) Draw this game in strategic form.

(b) Identify all (pure strategy) Nash equilibria of this game.
(c) Suppose that if a ght breaks out, the childrens parents withhold
their allowance, and this costs each boy 1000 jollies. Does this
parenting technique ensure that there is no equilibrium in which
a ght breaks out?