answer the following questions regarding the matrix below, which represents the strategic nteraction between the two largest movie production studios, Universal Pictures and 20th Century ox. They are each deciding the release dates for their own summer blockbuster action movies. They can release their movies in June, July, or August. Because of limited demand for going to the novies, each firm would generally rather release their movies earlier than later. Similarly, they would rather not release their movies at the same time, as it dilutes the demand for their movies. The matrix form of the game is as follows: Universal June July August June 5,5 4,6 7,8 Fox July 6,4 5,5 4,6 August 8,6 6,5 5,4 ) Suppose Universal and Fox make their decisions simultaneously. Are there any Nash equilibria? If so, what are they? Show your work. ) Suppose they move sequentially, and that Fox moves first. First set up the game tree. What will be the equilibrium path of the subgame perfect Nash equilibrium outcome? Would Fox want this to happen? Explain intuitively why or why not.

answer the following questions regarding the matrix below, which represents the strategic nteraction between the two largest movie production studios, Universal Pictures and 20th Century ox. They are each deciding the release dates for their own summer blockbuster action movies. They can release their movies in June, July, or August. Because of limited demand for going to the novies, each firm would generally rather release their movies earlier than later. Similarly, they would rather not release their movies at the same time, as it dilutes the demand for their movies. The matrix form of the game is as follows: Universal June July August June 5,5 4,6 7,8 Fox July 6,4 5,5 4,6 August 8,6 6,5 5,4 ) Suppose Universal and Fox make their decisions simultaneously. Are there any Nash equilibria? If so, what are they? Show your work. ) Suppose they move sequentially, and that Fox moves first. First set up the game tree. What will be the equilibrium path of the subgame perfect Nash equilibrium outcome? Would Fox want this to happen? Explain intuitively why or why not.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Problem 5.1. The inverse market demand for printer paper is given by P = 400 – 2Q. There are two firms who compete to produce this paper, each with a marginal cost of production equal to c = 40 over a large range of output (ie, assume constant marginal cost). The two firms compete in quantities, in other words they each simultaneously choose a quantity to produce (Cournot competition). Derive the Cournot-Nash equilibrium of this game. Please write final answers in the boxes, showing work in blank areas. (a) The reaction function for each firm. 91 (92): 92 (91) (b) Optimal output q for each firm. 92 = р = = π1 = (c) Market price (from demand curve). (d) Firm profits. 92 = π2 =