UB(2458Module Seven QuizAttempts2. Using a payoff matrix to determine the equilibrium outcomeZipride PricingSuppose that Zipride and Citron are the only two firms in a hypothetical market that produce and sell electric scootegives profit scenarios for each company (in millions of dollars), depending on whether it chooses to set a high or lowKeep the Highest / 5aHighLowCitron PricingHighLow11, 1118, 22, 18If Zipride prices high, Citron will make more profit if it chooses aa ▼ price.10, 10For example, the lower-left cell shows that if Zipride prices low and Citron prices high, Zipride will earn a profit of $1profit of $2 million. Assume this is a simultaneous game and that Zipride and Citron are both profit-maximizing firmsIf Citron prices high, Zipride will make more profit if it chooses aprice..TrueFalseConsidering all of the information given, pricing highIf the firms do not collude, what strategies will they end up choosing?Q Search this courseO Both Zipride and Citron will choose a high price.O Zipride will choose a high price, and Citron will choose a low price.OZipride will choose a low price, and Citron will choose a high price.O Both Zipride and Citron will choose a low price.Xprice, and if Zipride prices low, Citron will maa dominant strategy for both Zipride and Citron.price, and if Citron prices low, Zipride will maTrue or False: The game between Zipride and Citron is not an example of the prisoners' dilemma.A-ZbongoA+O

Nash equilibrium is a situation in which each player chooses an optimal strategy given the strategy chosen by the other player. It helps to determine the optimum solution in a non-cooperative game. The game is played simultaneously by Zipride and Citron. Each firm can either charge a Low price or a High price.When Zipride charges a High Price, Citron chooses a High price, then each firm would earn $11 million in profit. But if Citron charges a Low price when Zipride charges a High price, then Zipride earns $2 million in profit. And Citron will earn $18 million in profit. Now, if Zipride charges a Low price and Citron charges a High price, then the payoffs are $18 million for Zipride and $2 million for Citron in profit. And if both firms charge a Low price, then each would earn $10 million in profit. Therefore, When Zipride charges high, Citron earns more profit when it chooses a low price of 18 million compared to a profit of 11 million with a high price. Citron will have more profit when it selects a low price and now the profit is 10 million vs 2 million in case of high profit.Likewise, when Citron charges high, Zipride earns more profit when choosing a low price and if Citron charges low, Zipride earns more profit when choosing low. Thus, charging a low price is a dominating strategy for both firms.Zipride will choose a low price and Citron will choose a high price is an incorrect option because it is not a dominating strategy. Both Zipride and Citron will choose a high price as the incorrect option because it is not a dominant strategy.Both Zipride and Citron will choose a low price as the correct option because it is the dominant strategy. Zipride will choose a high price and Citron will choose a low price is an incorrect option because it is not a dominating strategy. Therefore both firms will end up charging low prices if they do not collude. The game between Zipride and Citron is an example of a prisoner dilemma. This is because here both the players are selecting a low-strategy game even though coordination between both of them will increase their profit. Just like in the prisoner dilemma, both the players could do better (earn larger profits) by cooperating. Therefore, it can be concluded that the statement is true.The answers are as follows:If Zipride charges high, Citron will make more profit if it chooses a low price and if Zipride charges low, Citron will make more profit when it chooses a low price.If Citron charges high, Zipride will make more profit if it chooses a low price, and if Citron charges low, Zipride will make more profit if it chooses a low price.Pricing high is not a dominating strategy for both Zipride and Citron. Both Zipride and Citron will choose a low price when they do not collude.The given statement is True because both players are choosing a dominating strategy.

Business

Economics

2. Using a payoff matrix to determine the equilibrium outcome Suppose that Zipride and Citron are the only two firms in a hypothetical market that produce and sell electric scoote gives profit scenarios for each company (in millions of dollars), depending on whether it chooses to set a high or low Zipride Pricing High Low Citron Pricing High 11,11 18,2 Low 2,18 10, 10 For example, the lower-left cell shows that if Ziprido

2. Using a payoff matrix to determine the equilibrium outcome Suppose that Zipride and Citron are the only two firms in a hypothetical market that produce and sell electric scoote gives profit scenarios for each company (in millions of dollars), depending on whether it chooses to set a high or low Zipride Pricing High Low Citron Pricing High 11,11 18,2 Low 2,18 10, 10 For example, the lower-left cell shows that if Ziprido

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

5. Duopolist firms 1 and 2 compete on price with some market differentiation. Demand for firm ie{1, 2} is q, = 2 – 2p, + p, Neither firm has costs. a. Find the best response functions for each firm in the static game. b. Find the unique Nash equilibrium prices in the static game. c. Are prices strategic complements or strategic substitutes? Briefly explain. d. Does Firm 1 want Firm 2 to increase or decrease p,?
Problem 3. Consider the following game with three firms. First, firms 1 and 2 si- multancously choose quantities q1 and q2 respectively. After observing firm 1 and 2's quantities, firm 3 chooses its quantity q3. There is no production cost and the inverse demand function is p= 12 – (91 +2 + 93). (a) Compute the SPNE of this game. (b) Give an example of Nash equilibrium s* with s = 4 and s, = 6 , that is not subgame perfect. game theory question
15. Consider two competing firms, JR and OG. Suppose OG produces an estab- lished product and JR can either produce a clone or a differentiated product. If JR produces a clone, OG can either sue JR or not sue it. If JR produces a differentiated product rather than a clone, OG can either buy JR or not buy it. The two firms are in a non-cooperative game whose extensive form is rep- resented in the tree diagram below, where the payoffs on the right represent profits. -1 for OG 1 for JR sue OG don't -2 for OG clone sue 1 for JR JR don't clone 1 for OG -1 for JR buy OG don't buy 2 for OG 0 for JR If the two firms' managers are rational and recognize each other as rational, then (a) JR clones and OG sues (b) JR does not clone and OG buys (c) JR does not clone and OG does not buy (d) JR clones and OG does not sue (e) JR clones and OG sues with probability .5
6. Consider the simultaneous move pricing game below. Which of the following statements is true concerning this game? a. The game has a dominant strategy (DSSC) solution b. The game has an iterated dominance (IESDS) solution c. The game has more than 1 Nash equilibrium d. None of the above statements are true Firm A Firm B H M L H 30,30 38,12 33,0 M 11,34 18,14 23,1 L 2,24 6,17 14,8
fnan421 Word Gözden Geçir Görünüm Varam V Ne yapmak isted ginzi soyieyin 2) Two firms, X and Y, are planning to market their new products. Each firm can develop TV, Laptop. Market research indicates that the resulting profits to each firm for the alternative strategies are given by the following payoff matrix: FIRM Y TV LAPTOP PHONE FIRM X TV 30, 30 50, 35 20, 50 LAPTOP 40,70 20, 20 50,80 PHONE 50,20 80,50 10,10 A) Find the Nash equilibria for this game, assuming that both firms make their decisions at the same time. (explain the decision step by step)i B) If each firm is risk averse and uses a maximin strategy, what will be the resulting equilibrium? (explain the decision step by step);
◄ Search 12:47 PM Sun Nov 12 ← Note Nov 12, 2023 Uptown's price strategy The Nash equilibrium occurs when High Low LED RareAir's price strategy High $12 $15 The more favorable outcome would be for $12 Tt ✪ $6 B Low $6 D $8. $15 $8 S O both firms have an incentive to deviate from this strategy given the strategy of the competing firm. It is shown by the dominant strategy of cell A. 92% neither firm has an incentive to deviate from this strategy given the strategy of the competing firm. It is shown by the dominant strategy of cell D. O one firm consistently has an incentive to deviate from this strategy given the strategy of the competing firm. It is shown by the high-price strategy of cell B. O one firm consistently has an incentive to deviate from this strategy given the strategy of the competing firm. It is shown by the high-price strategy of cell C. O the firms to collude and use the high-price strategy but this strategy requires cooperation. O one firm to take the lead and let the…
Consider the game having the following normal form. Which of the following strategies of the row player is a dominant strategy? COLUMN PLAYER A B 6, 5 -5, 11 7,9 ROW PLAYER Y 10, 6 7, 10 11, 9 11, 7 -4, 11 8, 4 W 11, 3 -1, 10 7,8 O W Y. Z. No dominant strategy
Want legit Answer please answer correctly and explain in detail
Q2
Solve all this question......you will not solve all questions then I will give you down?? upvote...
6. Using a payoff matrix to determine the equilibrium outcome Suppose that Zipride and Citron are the only two firms in a hypothetical market that produce and sell electric scooters. The following payoff matrix gives profit scenarios for each company (in millions of dollars), depending on whether it chooses to set a high or low price for scooters. Zipride Pricing price. High Low For example, the lower-left cell shows that if Zipride prices low and Citron prices high, Zipride will earn a profit of $13 million, and Citron will earn a profit of $3 million. Assume this is a simultaneous game and that Zipride and Citron are both profit-maximizing firms. Citron Pricing High 9,9 13, 3 If Zipride prices high, Citron will make more profit if it chooses a Low If the firms do not lude, 3, 13 6, 6 If Citron prices high, Zipride will make more profit if it chooses a price. Considering all of the information given, pricing low True False Both Zipride and Citron will choose a low price. strategies…
can you answer 20 please