Answered: Can you assign numbers to each of…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Game Theory

I am trying to assign numbers (theoretical)to a game im making. Its about Tipping. Its based on 3 different efforts a server has showed

Can you assign numbers to each of these. This is all made up so you can use whatever values they just need to be in regard to the other values.

Thanks. I was thinking to start on high effort Tip could be +10 and no tip could be -10 Best and worst scenario. You do high effort service and get tipped and high effort with no tip.

Thanks

Tip
High
Effort
Customer
No Tip
Tip
Server
Medium Effort
Customer
No Tip
Low Effort
Tip
Customer
No
Tip

Definition Definition Economic decision-making framework that analyzes how different players optimize their outcomes with given pay-offs corresponding to their available strategies. The assumptions of game theory are: The number of players or competitors are finite/limited; All participants are rational The rules of the game are known to every player; and Each participant has a finite set of actions. A common way in which game theory is presented as an ( m x n ) matrix in which m represents the strategies of row player and n represents the strategies of column player. There are several limitations of game theory: Many businesses have a large number of competitors, and selecting an optimal strategy in these circumstances is difficult; Real-life business operating environments are full of uncertainty and difficult to model as a game theory; and The assumption of rationality and utility maximization isn't always an accurate portrayal of human nature.

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