Cheetah Air and Eagle Air are competitors in airlineindustry. First, Cheetah Air decides whether to begin airservice to Maui or not. Then, Cheetah Air learns whetherdemand for the air service is high or low. This informationabout the market spills over to Eagle Air. Both know thatdemand will be high with probability 60% and low with40%. After observing the market demand level, Eagle Airdoes enter or stay out. This situation is represented in thefollowing game tree. The first number of each vector atterminal nodes is Cheetah's payoff and the secondnumber is Eagle's payoff. Find the rollback equilibrium ofthe game.begin air service to Mauldemand for air service to Maul0.5 (high)Eagle Ab(Cheetah Air0.4 Dow)Eagle Airenter stay out enter stay outAt node 1, Eagle Air will choosenode 2, it will chooseat node 4,do not create Maul routedemand for air service to Maut0.6 (high)(Eagle Air)". Hint: type either "enter" or "stay out."0.40)enter stay out enterEagle Airstay outat node 3,at.

In game theory, a dominant strategy is a strategy that is the best choice for a player, regardless…

Answered: Cheetah Air and Eagle Air are comper…

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

Question10: The game matrix table arranged according to player A is given.by solving the game with the graphic method;2-)Find the probability of playing strategy 1 of B.2-)Find the probability of playing B's strategy 2.3-) Find the expected game value.
Consider a small town with two competing restaurants: Doug’s Diner and Betty’s Bistro. There is 1000profit to be made in the market. Each period, the restaurants simultaneously decide whether to offer high orlow quality food. In order to offer high quality food, each restaurant must hire an expert chef, which incursan additional cost of 100. The restaurants split the profit equally if they offer the same quality of food. Ifone restaurant offers high quality food while the other offers low quality food, the high quality restauranttakes four fifths of the profit and the low quality restaurant takes one fifth of the profit.(a) Draw up the normal form game matrix, showing the players, strategies, and payoffs.(b) Determine the Nash equilibrium of this game.(c) Explain how the restaurant owners could both be better off than in the Nash equilibrium if they wereable to cooperate. Is the town as a whole better off or worse off when the firms cooperate? Why or whynot
N5
3. Consider the game below. С1 C2 C3 R1 1, 1 4, 6 8, 5 1, 2 5, 4 R2 R3 2, 6 2, 7 7, 6 0, 7 3.1. Does the game have any pure strategy NEs? 3.2. Check whether a mixed strategy NE exists in which A is mixing R1 and R2 with positive probabilities, playing R3 with zero probability, while B is mixing C1 and C3 with positive probabilities while playing C2 with zero probability. [Let (p1,P2, P3) be the probabilities with which A plays (R1, R2,R3) and let (q1,92, 93) be the probabilities with which B plays (C1, C2,C3). Make use of the following NE test: m* is a NE if for every player i, u;(mị , m²¿) = u;(Si, m²¡) for every si E S¡|m¡(sji) > 0 and u¡(m¡ ,m²¡) > u¡(s¡,m;) for every si E S¡ |m¡ (s¡) = 0. Hint: Each player must be indifferent between those of her pure strategies that are used (with positive probability) in her mixed strategy, and unused strategies must not yield a payoff that is higher than the payoff a player gets with her NE (mixed) strategy.] %3D
A9
Asap
1. Bothers John and Jason Rogers are trying to establish Illinois RiverHawk Floats to offer rafts for customers to float the Illinois River. 50 rafts are leased from a supplier for a monthly (30 days) cost of $415 per raft. The rafts are rented to customers for $25 per day. Customer demand follows a normal distribution, with a mean of 50 rafts and standard deviation of 8.5 rafts. (Make all demands integers in the model). If all 50 rafts are rented out, customers are referred to another outfitter who has a working relationship with the brothers. a. Set up the model and simulate a month (30 days) of operation to calculate the total monthly profit b. Replicate the simulation for 5 months (the expected float season) and determine the average total monthly profit. Note: this does not mean make 5 copies of the model. Run it 5 times, record and use the results appropriately.
. If you examine the decision tree in Figure 9.12 (orany other decision trees from PrecisionTree), you willsee two numbers (in blue font) to the right of each endnode. The bottom number is the combined monetaryvalue from following the corresponding path throughthe tree. The top number is the probability that thispath will be followed, given that the best strategy isused. With this in mind, explain (1) how the positiveprobabilities following the end nodes are calculated,(2) why some of the probabilities following the endnodes are 0, and (3) why the sum of the probabilitiesfollowing the end nodes is necessarily 1.
7. N [0.75] B A [0.25] 1 E F 6 2 J K J K 12 3 9. 6 6. 1 In equilibrium, what is the probability that player 1 will use the pure strategy E in this game?
‘Lottery A’ refers to a lottery ticket that pays $2,000 with a probability of 0.3, $8,000 with a probability of 0.4, $12,000 with a probability of 0.2, and $18,000 with a probability of 0.1.What is the expected value of Lottery A?A) $7200B) $8000C) $9000D) $7900E) None of the above
sub= 24 help
Asap

SEE MORE QUESTIONS

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