6. Consider a partnership game between two people, in which each player simultaneouslychooses an effort e; ≥ 0 to expend on a joint project, and receives in return a payoffπ₁1 = == R(e1, €2) - e³where the revenue R shared between the players is described by the functionR(e₁, €2) = 100 (e₁ + ₂ + €502)€₂1= R(e₁, 0₂) -π2 =(a) Find the best response functions BR₁(e₂) and BR₂(e₁), and the Nash Equilibrium(ei, e) for this game.(b) Find the payoff amounts ₁ and 7₂ at the NE.Note: recall that for all duopoly games, the payoff function for each player is of the formTį = P(q1, 92)qi – Ci(qi)uch that the game payoff is equal to the profit (= Revenue - Cost).

There are two players simultaneously optimizing their payoffs .Payoff of Player 1 : Pi1 = 0.5 R(e1…

Consider a partnership game between two people, in which each player simultaneously chooses an effort e; ≥ 0 to expend on a joint project, and receives in return a payoff T₁ = R(e₁,e₂) - €³ π1 1 = R(e1, 02) – €²2 772 = where the revenue R shared between the players is described by the function €1 €₂ 50 R(e₁,e2) = 100 (e₁ + €₂. + (a) Find the best response functions BR₁(e₂) and BR₂(e1), and the Nash Equilibrium

Consider a partnership game between two people, in which each player simultaneously chooses an effort e; ≥ 0 to expend on a joint project, and receives in return a payoff T₁ = R(e₁,e₂) - €³ π1 1 = R(e1, 02) – €²2 772 = where the revenue R shared between the players is described by the function €1 €₂ 50 R(e₁,e2) = 100 (e₁ + €₂. + (a) Find the best response functions BR₁(e₂) and BR₂(e1), and the Nash Equilibrium

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

Three consumers who want to buy a TV and a sound system have the following valuations for options offered by the store: (a) Assume that the dealer can charge only individual prices, one price for TV and one price for the Sound System. The goods are sold individually and are not bundled together, and any of the consumers may purchase either one or both goods separately. The store does not charge each consumer the price they are willing to pay but must charge the same price for all TV and the same price for all Sound Systems. What prices will the store charge for each item separately to maximize its total revenue from these three consumers, and what will be its total revenue? Please explain. Suppose that the store bundles TV and Sound Systems together and sells them as a bundle and does not sell them separately any longer. The consumers can no longer buy the goods separately, they will either have to buy a bundle containing both goods or buy nothing. The prices that the consumers…
Consider the following game played by four individuals, players 1, 2, 3, and 4. Each individual has $10,000. Each player can donate between $0 and $10,000 to build a public park that costs $20,000. If they collect enough money, they construct the park, which is worth $9,000 to each of them. However, if they collect less than $20,000, they cannot build a park. Furthermore, regardless of whether the park is built or not, individuals lose any donations that they make. a) Describe the Nash equilibria for a simultaneous game. What makes them equilibria? Hint: There are many equilibria, so you may want to use a mathematical expression! b) Suppose that players 1, 2, and 3, each donate $4,000 for the park. How much will player 4 donate and why. What are the resulting payoffs for the players? c) Suppose instead that player 1 donated first, player 2 second, player 3 third, and player 4 last. Furthermore, players could only donate in intervals of 1,000 (0, $1,000, $2,000, etc.). How much will…
Consider the following game in extensive form, involving the chance parameter p. PT] =P (0,0) N Answer: U P[H] = 1-p h B P[T] = P h d (-60,60) (20,-20) (40,-40) t (0,0) N P[H] = 1-p (0,0) Suppose that p = 0.75 and the strategy profile (u, h) is played. What expected payoff does player B receive? (Report your answer in decimal form, rounding if necessary to two places.
Suppose d = 1/4. Before the game starts, you tell the players that you will offer each of them money m > 0 at each period both of them cooperate. The new per period payoff matrix is as follows: (d) m≥ 0.4 (e) m≥ 1/1/3 C D At least how much should you offer to make the strategy described in part 6 a SPNE? (a) m≥ 1/1/5 9 (b) m≥ 0.2 (c) m≥ 0.3 این C D 2+m, 2+m| -3, 3 3, -3 1, 1
After graduation from business school, Pete wanted to start a new business. In competition with another firm, he became involved in developing a new technology that would allow consumers to sample food over the Internet. Given the newness of this market, technological compatibility across firms is important. Pete’s firm, DigiOdor, is far advanced in developing its Sniff technology. His competitor, WebTaste, has been working on an incompatible technology, Smell. If they both adopt the same technology, Sniff or Smell, they each may gross $150 million from the developing industry. If they adopt different technologies, consumers will later decide to purchase neither product, leading to gross sales of $0 each. In addition to the above considerations, switching over to the other technology would cost WebTaste $100 million right away and DigiOdor $250 million. In other words, WebTaste would incur additional costs of $100 million if it switched to Sniff technology, and DigiOdor would incur…
Consider the following three-player game represented in extensive form: Player 3 L Player 2 Player 1 R Player 2 U D Player 3 (0,2,0) U D U D (0, 1, 1) (0, 3, k) (0, 4, 3) (0,4,2) U D How many pure-strategy subgame-perfect Nash equilibria are there in this game if k > 1? 5 3 7 1 It depends on the value of k. (2,2, 0)
PLEASE CHECK THIS HOW TO SOLVE
Suppose that Lionel Messi is negotiating a contract with FC Barcelona. Messi has an offer from Real Madrid for $20 million a year. If he signs with FC Barcelona, they will earn $90 million in revenue from the signing. FC Barcelona's next best option is to sign Cristiano Ronaldo. They would earn $70 million from signing Ronaldo and would pay him a contract of $10 million. Messi's bargaining power is w = 1/2. a) What is the negotiated salary between Messi and FC Barcelona under Nash Bargaining? What is Messi's surplus and what is FČ Barcelona's surplus? b) Due to an injury, FC Barcelona would only earn $50 million from signing Ronaldo but everything else remains the same. What is the negotiated salary between Messi and FC Barcelona under Nash Bargaining? What is Messi's surplus and what is FC Barcelona's surplus?
Please select the correct option and write clear. Thank you.
Megan and Martha own competing hair salons that are in the same neighborhood. They are both considering offering their clients discounts in order to increase business. The payoff matrix shows their yearly incomes in thousands of dollars if they offer and do not offer discounts to their customers. Martha Megan Discount No Discount Discount $50, $75 $75, $60 No Discount $35, $90 $70, $85 If both Megan and Martha did not discount, what would each earn in yearly income? Megan would earn $50,000; Martha would earn $75,000. Megan would earn $75,000; Martha would earn $60,000. Megan would earn $35,000; Martha would earn $90,000. Megan would earn $70,000; Martha would earn $85,000. Megan would earn $35,000; Martha would earn $85,000.
1. Consider a sequential continuum game with two players, in which Player 1 first chooses a continuous variable £₁, and then Player 2 selects £2, with payoff functions ₁ and 7₂. Find the best response for P2, as the function î2 = BR₂(x1), for each given #₂: (a) (b) (c) T₂(x1, x₂) ) = (1400 — x1 — x2)x2 − 13x² T₂(x1, x₂) T₂(X1, X2₂) = : 100x2 + 3x1x2 − 14x1 – 30x1x² = 15x2 x² + x² +1
Answer to the image?