Coke and Pepsi are in a market together in which they can each make the following sequence of moves. First, Coke decides whether to launch a SPORTS drink or an ENERGY drink. Second, Pepsi observes Coke's choice then chooses SPORTS and ENERGY. If ENERGY is chosen by both firms, Coke gets 20 and Pepsi 60. If Coke chooses ENERGY and Pepsi SPORTS the payoffs are 50 and 30 to Coke and Pepsi, respectively. If Coke opts for SPORTS and Pepsi opts for ENERGY the payoffs are 50 and 30 to Coke and Pepsi. Finally, if both choose SPORTS the payoffs are 30 to Coke and 50 to Pepsi. In the subgame perfect (or credible) equilibrium, what do we observe each firm do? ● Coke opts for ENERGY and Pepsi SPORTS. ● Coke opts for SPORTS and Pepsi ENERGY ● Coke opts for SPORTS and Pepsi SPORTS ● Coke opts for ENERGY and Pepsi ENERGY None of above.

Coke and Pepsi are in a market together in which they can each make the following sequence of moves. First, Coke decides whether to launch a SPORTS drink or an ENERGY drink. Second, Pepsi observes Coke's choice then chooses SPORTS and ENERGY. If ENERGY is chosen by both firms, Coke gets 20 and Pepsi 60. If Coke chooses ENERGY and Pepsi SPORTS the payoffs are 50 and 30 to Coke and Pepsi, respectively. If Coke opts for SPORTS and Pepsi opts for ENERGY the payoffs are 50 and 30 to Coke and Pepsi. Finally, if both choose SPORTS the payoffs are 30 to Coke and 50 to Pepsi. In the subgame perfect (or credible) equilibrium, what do we observe each firm do? ● Coke opts for ENERGY and Pepsi SPORTS. ● Coke opts for SPORTS and Pepsi ENERGY ● Coke opts for SPORTS and Pepsi SPORTS ● Coke opts for ENERGY and Pepsi ENERGY None of above.

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

O Cell A O Cell C O Cell E O Cell I None of the above
Suppose Antonio and Trinity are playing a game that requires both to simultaneously choose an action: Up or Down. The payoff matrix that follows shows the earnings of each person as a function of both of their choices. For example, the upper-right cell shows that if Antonio chooses Up and Trinity chooses Down, Antonio will receive a payoff of 7 and Trinity will receive a payoff of 5. Trinity Up Down Up 4,8 7,5 Antonio Down 3,2 5,6 In this game, the only dominant strategy is for to choose The outcome reflecting the unique Nash equilibrium in this game is as follows: Antonio chooses, and Trinity chooses Grade It Now Save & Continue Continue without saving @ 2 F2 #3 80 Q F3 MacBook Air 44 F7 Dll F8 44 F10 74 $ 4 05 Λ & % 5 6 7 8 * 0 Q W E R T Y U 1 A N S X 9 0 -O O D F G H J K L on را H command C > B N M Λ - - P [ H Λ command opti
The count is three balls and two strikes, and the bases are empty. The batter wants to maximize the probability of getting a hit or a walk, while the pitcher wants to minimize this probability. The pitcher has to decide whether to throw a fast ball or a curve ball, while the batter has to decide whether to prepare for a fast ball or a curve ball. The strategic form of this game is shown here. Find all Nash equilibria in mixed strategies.
Microsoft and a smaller rival often have to select from one of two competing technologies, A and B. The rival always prefers to select the same technology as Microsoft (because compatibility is important), while Microsoft always wants to select a different technology from its rival. If the two companies select different technologies, Microsoft's payoff is 6 units of utility, while the small rival suffers a loss of utility of 2. If the two companies select the same technology, Microsoft suffers a loss of utility of 2 while the rival gains 2 units of utility. Using the given information, fill in the payoffs for each cell in the matrix, assuming that each company chooses its technology simultaneously. Microsoft Technology A Technology B Rival Technology A Rival: , Microsoft Rival: , Microsoft Technology B Rival: , Microsoft Rival: , Microsoft True or False: There is no equilibrium in pure strategies. True False Note:- Do not provide handwritten…
The US and Canada have overfished North Atlantic cod stocks nearly to the point of extinction. Both countries wish to preserve the cod industry (and hence the cod stocks), so the two countries sign an agreement to limit fish hauls. Each country has two possible strategies: comply with the agreement (limit fishing) or renege on the agreement (overfish). Each country’s payoffs for different strategy combinations are given in the matrix below. The numbers in the cells represent utilities, and the payoff ordering is (US, Canada). QUESTIONS: 1.If this is a one-shot game (i.e., it is played once), do the players have a dominant strategy? If so, what is it? Briefly explain your answer. 2.What is the equilibrium of this game? Is it Pareto-optimal? How do you know?
Use the following payoff matrix for a one-shot game to answer the accompanying questions. Player 2 Strategy X Y Player 1 A 30, 30 16, -50 B -50, 16 50, 50 A. Determine the Nash equilibrium outcomes that arise if the players make decisions independently, simultaneously, and without any communication. check all that apply (16, −50) (−50, 16) (30, 30) (50, 50) Which of these outcomes would you consider most likely? multiple choice (16, −50) (50, 50) (−50, 16) (30, 30) B. Suppose player 1 is permitted to “communicate” by uttering one syllable before the players simultaneously and independently make their decisions. What should player 1 utter? multiple choice A or B What outcome do you think would occur as a result? multiple choice (−50, 16) (16, −50) (30, 30) (50, 50) c. Suppose player 2 can choose its strategy before player 1, that player 1 observes player 2’s choice before making her decision, and that this move structure is…
Two supermarkets face the following possibilities. Superstore Advertise Don’t Advertise Megastore Advertise $95, $80 $305, $55 Don’t Advertise $65, $285 $165, $115 47. A Nash equilibrium is Group of answer choices for Megastore to advertise and for Superstore to advertise. for Megastore to advertise and for Superstore not to advertise for Megastore not to advertise and for Superstore to advertise. for Megastore not to advertise and for Superstore not to advertise. There is no Nas equilibrium in this rivalry game.
You suspect that you are a price leader in the market. Moreover, you are considering expanding your operations. H.R. Shovenstuff will observe your moves and then follow, but he is more secretive so you will not know whether to price high or low after his pricing decision has been made. Using the following game tree, solve for the Nash equilibrium. High Price Shovenstuff High Price Low Price You High Price (2,1) (6,2) Invest Low Price Invest, High Price, High Price O Invest, Low Price, High Price Invest, Low Price, Low Price O Don't Invest, High Price, High Price Don't Invest, Low Price, High Price LOW Price (2,4) You High Price (4,4) Don't Invest High Price Low Price Shovenstuff Low Price You High Price (8,1) (2.6) Low Price (2,1)