Suppose the players in Rubinstein's three-period bargaining game have the same discount factors: d for player 1 and player 2. At the beginning of the third period, player 1 receives a share s of the dollar, leaving 1 - s for player 2, where 0
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- If the market conditions for a given are specified by 60,000 -500p and Qs=500p,lf the government decide to set the price at 40 currency unit what policy is this?- Please interpret this set of assumptions. - At t=1, agent B owns the bond. What amount LB can agent B borrow from agent C in a repo trade at t=1 and what is the haircut?ABC Ltd., an Australian company, is expecting to export an equipment to China in December. The transaction will be settled in Chinese Yuan (CNY). Which of the following futures position between Chinese Yuan and Australian Dollar is appropriate for ABC Ltd. to hedge the foreign exchange risk? The company should short futures on the Chinese Yuan, O More than one of the other strategies is appropriate. The company should long futures on the Australian Dollar. None of the other strategies is appropriate. O The company should long futures on the Chinese Yuan.
- what is fisher effect theory and explian is it holds are not in short trem capital markets12.7 Trading Places: Two players, 1 and 2, each own a house. Each player i values his own house at v;. The value of player i's house to the other player, i.e., to player ji, is v₁. Each player i knows the value v; of his own house to himself, but not the value of the other player's house. The values v; are drawn independently from the interval [0, 1] with uniform distribution. a. Suppose players announce simultaneously whether they want to ex- change their houses. If both players agree to an exchange, the exchange takes place. Otherwise no exchange takes place. Find a Bayesian Nash equilibrium of this game in pure strategies in which each player i ac- cepts an exchange if and only if the value v; does not exceed some threshold 0;. b. How would your answer to (a) change if player j's valuation of player i's house were {v;? c. Try to explain why any Bayesian Nash equilibrium of the game de- scribed in (a) must involve threshold strategies of the type postulated in (a).Consider the following Bayesian game. There are two players 1 and 2. Both players choose whether to play A or B. Two states are possible, L and R. In the former, players play a stag-hunt game, and in the latter, players play a matching pennies game. Suppose that Player 2 knows the state, while Player 1 thinks that the state is L with probability q and R with probability 1 ! q. Payo§s in each state respectively satisfy: Player 1 is the row player, and their payo§ is the first to appear in each entry. Player 2 is thecolumn player and their payo§ is the second to appear in each entry. (a) What is the set of possible strategies for the two players in this game? (b) Find all the pure strategy Bayes Nash equilibria for any value of q 2 (0, 1).
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