Assignment-9

Game Theory

1.Two machine-tool companies, A and B competing for supplying a CNC lathe to a new factory.
Each company has listed its alternatives/ strategies for selling machine tools. The strategies of
Company A are as listed below.
a) Giving special price
b) Give 15% worth of additional tools
c) Supplying some work holding device free of cost
The strategies/ alternatives of Company B are as follows.
a) Giving special price
b) Giving 20% worth of additional tools
c) Giving free training to the users of the organization which is buying the
machine.
The estimated gains (+)/ losses (–) in lakhs of rupees of Company A for various combinations
of the alternatives of both the companies are summarized in the following table. Find the
optimal strategies for each of the companies. Ans (A(1, 0, 0), B(1, 0, 0) & V = Rs.40 lakhs)
Company B
1 2 3
1 40 45 50
Company A 2 20 45 60
3 25 30 30

2. Consider the following payoff matrix with respect to Player A and solve it optimally.

Ans (A(7/17, 10/17), B(9/17, 8/17) and V = 216/17)

B
1 2
A 1 8 18
2 16 9

3. Solve the following game. Use Dominance property if saddle point doesn’t exist

Ans (A(0, 7/10, 3/10), B(0, 2/5, 3/5) & V = 6.2)

Player B
1 2 3
1 -3 4 2
Player A 2 7 8 5
3 6 2 9
4. Consider the following 4x4 game played by Players A and B and solve it optimally using
dominance property Ans (A(1/5, 0, 4/5, 0), B(1/5, 4/5, 0, 0) & V = 5.6)

Player B
1 2 3 4
Player A 1 12 4 8 16
A 2 4 -2 2 24
3 4 6 6 18
4 10 4 12 20

5. Consider the payoff matrix of Player A as given below and solve it optimally using graphical
method Ans (A(13/21, 8/21), B(0, 10/21, 0, 11/21, 0) & V = – 46/21)

Player B
1 2 3 4 5
Player A 1 4 2 5 -6 6
2 7 -9 7 4 8