MAT101: Fundamentals of Mathematics
Assignment 1
Submission Deadline: 28-11-2024
April 6, 2025
Instructions
Solve the following problems carefully. Provide clear justifications for all answers, espe-
cially for strategies, Nash equilibria, and reasoning about game outcomes.
Problem 1: Two neighboring farmers, Farmer A and Farmer B, share access to a
common water resource. Each farmer can decide to Share Water or Hog Water. The
outcomes depend on their choices:
• If both farmers Share Water, they each get a moderate payoff of 4, as the resource
is fairly distributed.
• If both farmers Hog Water, they each get a low payoff of 2, as neither gets enough
water for optimal crop yields.
• If one farmer Hogs Water and the other Shares Water, the one hogging water
gets a high payoff of 6, while the one sharing water gets nothing.
(a) Show the normal form representation and extensive form representation.
(b) What are the best responses for each player, given the opponent’s strategy?
(c) Identify any Nash equilibria in the game.
(d) Does this game encourage Sharing Water or Hogging Water? Why?
Problem 2: Two biotech companies, GeneTech and PharmaLife, are racing to secure
dominance in a lucrative vaccine market. Each company approaches the challenge with
different strategic options, leveraging their strengths and resources:
GeneTech’s Strategies:
(i) Develop New Technology: Focus on creating a breakthrough vaccine platform.
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(ii) Refine Existing Vaccine: Enhance the performance of an existing vaccine.
(iii) Secure Government Funding: Lobby for grants and contracts to support develop-
ment.
PharmaLife’s Strategies:
(i) Expand Production Capacity: Increase manufacturing to dominate supply.
(ii) Invest in Marketing: Promote their vaccine aggressively.
(iii) Collaborate with Distributors: Build partnerships to expand their market reach.
Winning Conditions:
• Develop New Technology (GeneTech) is effective against Expand Production (Phar-
maLife) but weak against Invest in Marketing.
• Refine Existing Vaccine is effective against Collaborate with Distributors but weak
against Expand Production.
• Secure Government Funding is effective against Invest in Marketing but weak
against Collaborate with Distributors.
• All other combinations result in stalemates (0, 0).
Tasks:
(a) Show the normal form representation.
(b) Determine the best responses for each player.
(c) Identify the Nash equilibria.
Problem 3: Two law firms, LexCorp and LawSmith Partners, are vying to win a high-
profile class action lawsuit. Each firm has 4 strategies, and their success depends on how
they allocate their resources to various legal tactics:
Strategies:
(i) File Motions: Dedicate resources to filing motions to control the proceedings.
(ii) Gather Evidence: Focus on discovering new evidence.
(iii) Hire Expert Witnesses: Invest in credible expert testimony.
(iv) Media Campaign: Run a PR campaign to sway public opinion.
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Winning Conditions:
• File Motions dominates Media Campaign.
• Gather Evidence dominates File Motions.
• Hire Expert Witnesses dominates Gather Evidence.
• Media Campaign dominates Hire Expert Witnesses.
• All other combinations result in stalemates (0, 0).
Tasks:
(a) Show the normal form representation.
(b) Determine the best responses for each player.
Problem 4: Two gardeners, Gardener 1 and Gardener 2, decide which type of flower
to plant in a shared garden. Use Iterative Elimination of Strictly Dominated
Strategies (IESDS) to find the rational behavior of the following game:
Gardener 2
Tulips Daisies Roses
Tulips (3, 1) (5, 2) (2, 0)
Gardener 1 Daisies (1, 3) (2, 1) (0, 2)
Roses (0, 0) (1, 4) (3, 1)
Problem 5: Two fitness enthusiasts, Enthusiast 1 and Enthusiast 2, choose one type
of exercise to focus on during a session. Use Iterative Elimination of Strictly Dom-
inated Strategies (IESDS) to find the rational behavior of the following game:
Enthusiast 2
Yoga Weighlifting Cardio
Yoga (5, 6) (4, 2) (1, −7)
Enthusiast 1 Weighlifting (3, 1) (1, 4) (9, 3)
Cardio (2, 0) (0, 6) (8, 7)
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Problem 6: Two companies decide between adopting Standard A or Standard B, but
now they may randomize their choices:
Company 2
Standard A Standard B
Company 1 Standard A (3, 3) (0, 0)
Standard B (0, 0) (2, 2)
Find the mixed strategy nash equilibrium and expected utility of each player.
Problem 7: In this game, Player 1 chooses between Up and Down, while Player 2
chooses between Left and Right:
Player 2
Left Right
Player 1 Up (3, −3) (−2, 2)
Down (−1, 1) (0, 0)
Find the mixed strategy nash equilibrium and expected utility of each player.
Problem 8: In this game, two generals can choose between three strategies: Pass, One,
or Two. The payoffs are as follows:
General 2
Pass One Two
Pass (1, 1) (0, 0) (0, 0)
General 1 One (0, 0) (2, 2) (−1, 3)
Two (0, 0) (3, −1) (0, 0)
Find the mixed strategy nash equilibrium and expected utility of each player.
