3) Two firms, X and Y, are planning to market their new products. Each firm can developTV, Laptop. Market research indicates that the resulting profits to each firm for thealternative strategies are given by the following payoff matrix (25 Points):FIRM YTVLAPTOPPHONEFIRM XTV30, 3060 , 3520, 50LAPTOP40,7020, 2050,80PHONE50,2080,5010,10A) Find the Nash equilibria for this game, assuming that both firms make their decisionsat the same time. (explain the decision step by step) :B) If each firm is risk averse and uses a maximin strategy, what will be the resultingequilibrium? (explain the decision step by step) :C) What will be the equilibrium if Firm X makes its selection first? If Firm Y goes first?|

A subject which helps entities decide the moves which are the best for them is said to be game…

4) Find the Nash equilibria for this game, assuming that both firms make their decisions at the same time. (explain the decision step by step) : 3) If each firm is risk averse and uses a maximin strategy, what will be the resulting equilibrium? (explain the decision step by step) : C) What will be the equilibrium if Firm X makes its selection first? If Firm Y goes first?|

4) Find the Nash equilibria for this game, assuming that both firms make their decisions at the same time. (explain the decision step by step) : 3) If each firm is risk averse and uses a maximin strategy, what will be the resulting equilibrium? (explain the decision step by step) : C) What will be the equilibrium if Firm X makes its selection first? If Firm Y goes first?|

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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6)Game Theory: The Prisoners’ Dilemma: Assume that the Wilson and Spalding athletic equipment companies are in a one-shot game for market share and profits, but that they have the option of choosing only one of two possible price strategies for basketballs: $20 or $80. Obviously if they choose different strategies, the firm with the lower price will win the entire market. The firms face the following payoff matrix (See Chap. 10). Wilson\ \Spalding Wilson $ 20 Price Wilson $ 80 Price Spalding $ 20 Price $ 400, $ 400 $ 1500, $ 0 Spalding $ 80 Price $ 0, $ 1500 $ 1000, $ 1000 What strategy will each firm choose? Why? Which strategy is dominant? Which strategy is preferred by each firm? What will be the outcome of the one-shot game? Where is the Nash equilibrium? Which outcome would be best for the two firms? What will happen if the game is repeated an infinite number of times?
Construct the sequential game tree when Cable-net takes the first mover position by deciding whether to invest in infrastructure capacity expansion. Find the Nash equilibrium path by using the roll-back technique. How much profit does each firm earn? (Hint: the game tree will have three sequential decisions: Cable-net makes the decision first whether to invest in infrastructure capacity expansion, Peoplenet makes the entry decision, and Cable-net decides whether to lower the price.)
Q:3 a,b and c
Two rival companies competing in the same market need to decide their plans for future expansion of their stores. The Table below shows the possible outcomes of their mutually interdependent actions (payoffs are profits in £m) Giga Company Titanic Conglomerate No Change Refurbishment of existing stores Large Expansion No Change 30, 40 25, 35 15, 24 Refurbishment of existing stores 35, 30 28, 32 18, 33 Large Expansion 12, 22 18, 20 20, 25 The Nash equilibrium: (A) does not exist. (B) occurs when both firms choose Refurbishment of existing stores. (C) occurs when both firms choose Large Expansion. (D) occurs when both firms choose No Change.
4) Consider the following payoff matrix: Player 1 Strategy A Strategy B c) Is the payoff matrix symmetric? Player 2 Strategy A Strategy B (0,0) (7,4) (2,2) (3,3) a) Does either player have a dominant strategy? b) Is there one or more Nash Equilibrium? 1
1. Consider the following game matrix. Player A Answer: Top Bottom Left a, b e, f Player B Right c, d g, h (a) If top and left are strictly dominant strategies, then what do we know the relationship of the parameters? (b) If (top, left) is a Nash equilibrium, then what do we know the relationship of the parameters? Answer: (c) If top and left are strictly dominant strategies, will (top, left) be a Nash equilibrium? Why? Answer: (d) If (top, left) is a Nash equilibrium, must the strategies be strictly dominant strategies? Why? Answer:
Please answer fast
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Question 8: Consider the strategic game above. Which of the following is true? a. for Player 1, x1 is strictly dominated by a mixed strategy b. for Player 1,x2 is strictly dominated by a mixed strategy c. for Player 1, x3 is strictly dominated by a mixed strategy d. for Player 1, no action is strictly dominated by a mixed strategy
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2) Two firms, X and Y, are planning to market their new products. Each firm can develop either TV or 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 FIRM X TV 30, 30 60, 35 LAPTOP 40,70 20, 20 A) If both firms make their decisions at the same time and follow maximin (low-risk) strategies, what will the outcome be? B) Suppose both firms try to maximize profits, but Firm X has a head start in planning, and can commit first. Now what will the outcome be? What will the outcome be if Firm Y has a head start in planning and can commit first? C) What is the cooperative outcome? D) Which firm benefits most from the cooperative outcome? How much would that firm need to offer the other?
3. Consider the following game: K Out 2 2 1 9 Player 1 Player 1 X In A Y Player 2 0 2 B 5 5 a) Does the game have perfect information? Why/why not? b) Circle the subgames. c) Find all backward induction solutions. d) Below are written five strategy profiles. One of them is a subgame perfect equilibrium; circle it! One of them is not a Nash equilibrium; write "X" across it! ((Out, X), A) ((Out, Y), A) ((In, Y),B) ((Out, Y), B) ((In, X),B)