1Y You have to decide whether to invest $100 in a friend's enterprise, where in a year's time the money will increase to $150. You have agreed that your friend will split the profits evenly each year with you. Your alternative is to keep at the bank at an interest rate of r. Suppose this game is played repeatedly infinitely often. The rate of interest between any two successive periods is r, the same as that in the bank and the same for you and your friend. What is the cut-off interest rate which will make cooperation possible? KI02

1Y You have to decide whether to invest $100 in a friend's enterprise, where in a year's time the money will increase to $150. You have agreed that your friend will split the profits evenly each year with you. Your alternative is to keep at the bank at an interest rate of r. Suppose this game is played repeatedly infinitely often. The rate of interest between any two successive periods is r, the same as that in the bank and the same for you and your friend. What is the cut-off interest rate which will make cooperation possible? KI02

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter7: Uncertainty

Section: Chapter Questions

Problem 7.7P

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Suppose that a large discount retailer with a lot of purchasingpower in a supply chain requires that all suppliers incorpo-rate a new information system that will reduce the cost of placing orders between the retailer and its suppliers as wellas between the suppliers and their suppliers. Suppose alsothat order quantities and lead times are related; the smallerthe order quantity the shorter the lead time from suppliers.Assume that all members of the supply chain use a continu-ous review system and EOQ order quantities. Explain the im-plications of the new information system for the supply chainin general and the inventory systems of the supply chainmembers in particular
Karen goes to the casino with 1000$ and plays the following strategy: In her first game, she putsin 1$. If she wins, she finishes playing and takes her profit home. If she looses a game, she willplay another game and put in twice as much money as she did in the previous game. If she wins,she will finish playing and take her profits home. She will keep going with that strategy, untilshe either wins a game or runs out of money.(a) Create a table for n = 1, 2, ..., 10 which lists: (a) The amount of money she puts in in game n;(b) the sum of the amount of money she has put in in all games up to this game n; and (c)her overall profit if the game n is the first game she wins.(b) What is the likelihood of her loosing 8 games in a row?(c) How many games can she loose in a row before she cannot afford to continue with herstrategy of doubling her bet?(d) Given the low likelihood of loosing, is this a smart strategy for Karen to pursue?
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4 Problem: Ticket Exchange Each of two players draw a lottery ticket with a random prize written on it. You can assume that prizes a uniformly drawn from an interval between 0 and 100 (can you solve it without uniform assumption?). Both player simultaneously decide whether to keep the prize or exchange the ticket with another player. If both decide to exchange, then the tickets are swapped and each player collects a prize from the newly acquired ticket. Find the BNE of the game. Hint: consider cut-off strategies, i.e. that prizes above some x are kept, and below z are offered for exchange.
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Suppose, unfortunately, your mathematics andeconomics professors have decided to give teststwo days from now and you can spend a total ofonly twelve hours studying for both exams. Aftersome thought, you conclude that dividing yourstudy time equally between each subject will giveyou an expected grade of C in each course. Foreach additional three hours of study time for oneof the subjects, your grade will increase one letterfor that subject, and your grade will fall oneletter for the other subject.48 PART 1 • Introduction to EconomicsCopyright 2019 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.a.…
i am not sure how to ask anther question after the expert answered one of mine but here is a question i asked the expert and the naswer he game me in picture 1 & 2. the questions insnt linked from other sites its from bartleby just coudlnt see option to ask anther. can you answer this part now: Now assume the financial advisor knows that another advisor will offer a competitive portfolio. Based on historical data, he knows this competitive portfolio’s total return follows a normal distribution with mean £36mil and standard deviation of £2mil and is priced at 5% of total return. Clients will naturally choose the advisor which offers the portfolio with the highest net How does the distribution of profit over the range of financial prices considered in part B) changes, when the competitor is considered?
2. Consider a game that game theory people refer to as the “ultimatum game.”We will refer to our two players as the “offerer” and the “decider”. How the gameworks is that the offerer proposes a way to split $1000 between the two players.While this could be done in a variety of ways, we will assume that the offerersonly has two possible proposals: Either a 50-50 split, or she offers the decider$50 and keeps the rest. The decider can either accept or reject the offer. If the offer is accepted, the money is split as proposed. If the offer is rejected, themoney spontaneously combusts and nobody gets anything. a) List the strategies for each player and write an extensive form version of thegame with payouts. b) List all the Nash equilibria of this game. c) Explain which, if any of the Nash equilibrium are not sub-game perfect. d) Write the game out in normal form and find the pure strategy Nashequilibrium. Explain how this matches with your answers to (b) and (c) . Alsoexplain why there…
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QUESTION 14 Five friends go to a restaurant. They talk about how to divide the check Under which of the following possible arrangements would you expect the group to spend the most? You may assume that acting generosly does not give any them any utility. O a. everyone pays only for what he eats (plus the prorate share of tax and tip) b. they divide the bill in five equal shares Oc. the riches person pays O d. it is impossible to tell