2. Two producers of the same good repeatedly compete in prices for T periods. They have the same discount factor 8. In thestage game, each firm chooses between three price levels 2, 4, and 10. The Bertrand stage game profits are given by:(12 - pi)(pi - 2),Pi < p-iui(pi, p-i) =-(12 Pi)(Pi-2), Pi = p-iPip-iIn each of the following parts you must explain your positive or negative answer. If your answer says that some path can beimplemented in an SPNE, then you must list the strategies. (d) Suppose T = ∞0, and 8 € (0, 1). For which 8 can the path ((2, 2), (2, 2), ...) be implemented in a SPNE using any strategies?(e) Suppose T = ∞, and 8 = (0,1). For which 8 can the path ((10, 10), (10, 10), ...) be implemented in a SPNE using grimtrigger strategies?

Answered: Image /qna-images/answer/6677e279-0159-4b47-aad8-7dd5c12a3134.jpg

Answered: 2. Two producers of the same good…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

This is a two-player, simultaneous one-move game represented as a game table (normal form). What is the pure strategy Nash equilibrium outcome if there is one? Is this a socially optimal outcome? If not, which outcome is preferred?
Two coins are tossed : (a) if A, is the event that the first coin is a tail and A, is the event that the second coin is a tail and A, is the event that the second coin is a head are A, and A, mutually exclusive ? Obtain P(A, U A) and P(A, n A,), (b) if further the event A, is that both the coins are heads and A, is that both the coins are tails are A, and A, mutually exclusive ? Are they exhaustive ? Obtain P(A, UA,).
true or false If profit (∏=TR−TC∏=TR−TC) is equal to zero, the entrepreneur has earned nothing for his talent and risk taking.
Suppose a firm is investing in a pollution control technology to meet a regulation in three years that can reduce its emissions for any given level of output. The technology costs $40,000 to install now, but will cost only $10,000 three years later due to expected innovations. If the firm does not comply, it will have to pay fines with the amount of $5000 in the next year, $10,000 in two years, and $15,000 in three years. With an interest rate of 3%, should the firm install this technology now or later?
A small community has 20 people, each of whom has a wealth of $12,000. Each individual must choose whether to contribute $300 or $0 to the support of public entertainment for their community. The money value of the benefit that a person gets from this public entertainment is b times the total amount of money contributed by individuals in the community. Question 3 options: If 20b > 1, everybody is better off if all contribute to the public entertainment fund than if nobody contributes, but if 20b < 1, everybody is better off if nobody contributes than if all contribute Everybody is worse off if all contribute than if nobody contributes if b > 1, but if b < 1, everybody is better off if nobody contributes. This game has a dominant strategy equilibrium in which nobody contributes anything for public entertainment. If 20b > 1, there is a dominant strategy equilibrium in which everybody contributes. In order for there to be a dominant strategy equilibrium in which all…
Three firms in a single industry are the only source, in a given airshed, of emissions of a uniformly mixed pollutant, say, CO₂. Their emissions levels are currently e₁ = 300, e2 = 200, and e3 100, where the subscript denotes firms. The environmental regulator has decided that emissions should be reduced by half, to E=300. The firms' abatement cost functions are given by C₁ (a₁) = 0.1a₁, C₂(a₂) = 0.2a2, and C3 (a3) = 0.3a²3 respectively. (It is assumed that these functions describe the firms' entire cost structure, including the cost of producing the optimal level of output given e;.) Enforcement costs are zero and there is no uncertainty. Suppose the regulator decide to employ a Command-and-Control scheme, requiring that each firm reduce its emissions in proportion to ej. Calculate the aggregate cost of abatement and each firm's emissions level.
You are a college sophomore who tutors fellow classmates in your free time for extra money. With your current abilities, you can earn $2,000 per year for the next three years from tutoring. However, suppose you have the option of enhancing your ability to tutor by acquiring special training for $6,000. After paying the fee, the training takes two years to complete, but at the end of this training period, you can earn $13,000 tutoring during the third year. While training in your free time, you are unable to continue tutoring. At what discount rate would you be indifferent between acquiring and not acquiring the training? You would be indifferent if the discount rate were percent. (Enter a numeric response rounded to two decimal places.)
You and a friend are in Bits & Bytes restaurant, and the owner offers both of you an 8-slice pizza for free under the following condition. Each of you must simultaneously announce how many slices you would like; that is, each player i E 1,2 names his desired amount of pizza, 0s s, S 8. If s + sz S8 then the players get their demands (and the owner eats any leftover slices). If Si + s2> 8, then the players get nothing. Assume that you each care only about how much pizza you individually consume, and the more the better. Assume the demands can be only in integer numbers. Write out each player's best-response correspondence. B. What outcomes can be supported as pure-strategy Nash equilibria? A.
I need the answer as soon as possible

Recommended textbooks for you

ENGR.ECONOMIC ANALYSIS

Economics

ISBN:

9780190931919

Author:

NEWNAN

Publisher:

Oxford University Press

Principles of Economics (12th Edition)

Economics

ISBN:

9780134078779

Author:

Karl E. Case, Ray C. Fair, Sharon E. Oster

Publisher:

PEARSON

Engineering Economy (17th Edition)

Economics

ISBN:

9780134870069

Author:

William G. Sullivan, Elin M. Wicks, C. Patrick Koelling

Publisher:

PEARSON

ENGR.ECONOMIC ANALYSIS

Economics

ISBN:

9780190931919

Author:

NEWNAN

Publisher:

Oxford University Press

Principles of Economics (12th Edition)

Economics

ISBN:

9780134078779

Author:

Karl E. Case, Ray C. Fair, Sharon E. Oster

Publisher:

PEARSON

Engineering Economy (17th Edition)

Economics

ISBN:

9780134870069

Author:

William G. Sullivan, Elin M. Wicks, C. Patrick Koelling

Publisher:

PEARSON

Principles of Economics (MindTap Course List)

Economics

ISBN:

9781305585126

Author:

N. Gregory Mankiw

Publisher:

Cengage Learning

Managerial Economics: A Problem Solving Approach

Economics

ISBN:

9781337106665

Author:

Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:

Cengage Learning

Managerial Economics & Business Strategy (Mcgraw-…

Economics

ISBN:

9781259290619

Author:

Michael Baye, Jeff Prince

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS