Consider a two-person zero-sum game where the payoff listed below are the winnings for Company X. The given payoff matrix is: Company Y Strategies Company X Strategies y1 y2 y3 x1 3 5 9 x2 8 4 3 x3 7 6 7 Identify the pure strategy solution. What is the value of the game

Consider a two-person zero-sum game where the payoff listed below are the winnings for Company X. The given payoff matrix is: Company Y Strategies Company X Strategies y1 y2 y3 x1 3 5 9 x2 8 4 3 x3 7 6 7 Identify the pure strategy solution. What is the value of the game

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter16: Bargaining

Section: Chapter Questions

Problem 3MC

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Consider the following information for a simultaneous-move game: two discount stores (megastore and superstore) are interested in expanding their market share through advertising. The table below depicts the profits of both stores with and without advertising. Payoffs for Megastore are in bold A Nash Equilibrium Superstore Advertise Don't Advertise Megastore Advertise $95, $80 $305, $55 Don't Advertise $65, $285 $165, $115 If firms could collude, then it would be optimal. ‍for the Megastore to advertise and for the Superstore to advertise ‍for the Megastore to advertise and for the Superstore not to advertise ‍for the Megastore to not advertise and for the Superstore to advertise ‍for the Megastore to not advertise and for the Superstore to not advertise
Bob's Product- Strategy Pizza No Pizza Sam's Product Strategy No Pizza A U Pizza -$10 с -$10 $0 $15 B D $15 $10 $0 $10 Refer to the payoff matrix. Bob's Burgers and Sam's Sandwiches are competing restaurants in a small town. Both are considering adding pizza to their line of products. If this is a sequential game but we don't know who moves first, what can we say about the final outcome? A. There is no Nash equilibrium attainable for this game. B. Cell A represents the only Nash equilibrium possible for this game. C. Cell D represents the only Nash equilibrium possible for this game. D. Cells B and C both represent possible Nash equilibrium outcomes for this game.
Is there a Nash Equilibrium for this game? If so, what is it? O The Nash Equilibrium is for both first to choose the high price. O The Nash Equilibrium is for both first to choose the low price. O The Nash Equilibrium is for Chevron to choose the high price while Shell chooses the low price. O The Nash Equilibrium is for Shell to choose the high price while Chevron chooses the low price. O There is no Nash Equilibrium for this game.
Consider the following information for a simultaneous-move game: two discount stores (megastore and superstore) are interested in expanding their market share through advertising. The table below depicts the profits of both stores with and without advertising. Payoffs for Megastore are in bold. A Nash Equilibrium Superstore Advertise Don't Advertise Megastore Advertise $95, $80 $305, $55 Don't Advertise $65, $285 $165, $115 A Nash equilibrium for the Megastore to advertise and for the Superstore to advertise for the Megastore to advertise and for the Superstore not to advertise for the Megastore to not advertise and for the Superstore to advertise for the Megastore to not advertise and for the Superstore to not advertise
a. b. Each firm has four alternative strategies, and a certain profit/payoff is associated with each strategy. The numbers in the payoff matrix denote firm A's profit (in thousands of dollars). The total amount of profit that can be earned by the two firms together is $20000. (This is called a "constant sum game.") Firm B's profit is therefore $20000 minus firm A's profit. What strategies will the two firms select? Is the game strictly determined? If so, how much does each firm gain? B's strategies A's strategies ↓ Increase Advertising Decrease Price Increase Price Alter Product Increase Advertising 0 11 8 11 Decrease Price 8 10 6 2 Increase Price 7 12 15 Alter Product 4 15 3 12 Suppose now that due to a change in consumer preferences, firm A's "Increase Price" strategy pays off better than before when firm B elects to "Decrease Price," that is, the payoff rises from 6 to 14. What strategies will the two firms now select? Is the game strictly determined? If so, how much does each firm…
Consider the following game: Mercedes-Benz and Honda are the only two firms in the market for automobiles. Each firm has two strategies: produce high-grade vehicles or produce low-grade vehicles. The first entry in the bracket is the payoffs (in $billion) of Mercedes-Benz and the second entry is the payoffs of Honda. (see the image) What is the dominant strategy of Mercedes-Benz and Honda? Also, what is the Nash equilibrium of this game?
Two firms are competing on price. If they have the same price, they share the market otherwise the one with the lowest price captures all demand Market demand follows Q(P)=100-3P Cost is C(Q)=10Q Firms can only choose between the following prices: 9, 10, 11, 12. In the Nash equilibrium of this game, what prices are charged? Suggestion: calculate the profits they obtain for each of the price combinations, write down the game in its normal form (payoff matrix), and then use the underlining method to match best responses. U ப U 9 12 10 110 11
Which of the following is the COLLUSIVE OUTPUT in the Game Theory Matrix below? * Firm B Payoff = Expected Profit ($m) High Price Low Price High Price $4m; $4m $-1m, $6m Firm A Low Price $6m; $-1m $1m, $1m Both firms choose High Price Both firms choose Low Price Firm A chooses Low Price; Firm B chooses High Price O Firm A chooses High Price; Firm B chooses Low Price
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Use the following payoff matrix to answer the questions below. Cooperate Defect 1 Cooperate 100, 100 40, 125 Defect 125, 40 50, 50 Which player (if any) has a Dominant Strategy? [ Select ] What is the Nash Equilibrium of this game? [ Select ] Does this game satisfy the definition of a prisoner's dilemma? [ Select ]
Consider the following information for a simultaneous move game: If you advertise and your rival advertises, you each will earn £5 million in profits. If neither of you advertises, you will each earn £10 million in profits. However, if one of you advertises and the other does not, the firm that advertises will earn £15 million and the non-advertising firm will earn £1million. Answer the following questions: a)Please draw the payoff matrix for the game b)What is the outcome of this game? What payoff will each firm earn? c)What is the reasoning that you have followed in order to arrive at this outcome? d)Is this a Prisoner's Dilemma? Why or why not? e)Suppose that this game is played sequentially instead of simultaneously and that you decide first. Draw the game tree of this game. What is the equilibrium of this sequential game? How did you arrive to this conclusion?
Consider the following simultaneous-move game that represents the payoffs from different advertising campaigns (low, medium, and high spending) for two political candidates that are running for a particular office. The values in the payoff matrix represent the share of the popular vote earned by each candidate is given below. The equilibrium in dominant strategies Candidate A-low Candidate A-medium Candidate A-high Ois (low. low). O is (medium, medium). O is (high, high). O is (medium, high) O does not exist. Candidate B-low Candidate B-medium Candidate B-high 50, 50 60,40 80, 20 40, 60 50, 50 65, 35 20, 80 35,65 50, 50