Problem set 3

Advanced Microeconomics,

Ec 992, Spring 2024

Extensive form. games and subgame perfection

1. Exercise 9.B.2 of MWG textbook.

2. Exercise 9.B.3 of MWG textbook.

3. Exercise 9.B.6 of MWG textbook.

4. Exercise 9.B.7 of MWG textbook, except the T = ∞ case. (You may find it helpful to start with a specific number, eg. T = 3 or T = 2, like in the lecture.)

5. Exercise 9.B.9 of MWG textbook.

6. Exercise 9.B.10 of MWG textbook

7. Exercise 9.B.14 of MWG textbook.

8. Exercise 12.C.18 of MWG textbook.

9. Exercise 12.E.6 of MWG textbook. [Note: for the last part, consider the set up in Example 12.E.1 (MWG) with p(q) = max{1 − q, 0}, K = 16/1 , c = 4/1.]