Consider the following game. Firm 1 can implement one of two actions, A or B. Firm 2 observes the action chosen by Firm 1 and then decides whether to fight it or not. F2 (-10, 20) Fight A Don't fight -(30, 10) Firm 1 (-10, 0) Fight B Don't fight -(20, 15) (a) Consider the following strategy profile: Firm 1 chooses A; Firm 2 chooses fight if A, and fight if B. • this strategy profile is [Select] (b) Consider the following strategy profile: Firm 1 chooses B; Firm 2 chooses fight if A, and don't fight if B. • this strategy profile is [Select ] (c) Consider the following strategy profile: Firm 1 chooses B; Firm 2 chooses don't fight if A and don't fight if B. • this strategy profile is [Select] F2
Consider the following game. Firm 1 can implement one of two actions, A or B. Firm 2 observes the action chosen by Firm 1 and then decides whether to fight it or not. F2 (-10, 20) Fight A Don't fight -(30, 10) Firm 1 (-10, 0) Fight B Don't fight -(20, 15) (a) Consider the following strategy profile: Firm 1 chooses A; Firm 2 chooses fight if A, and fight if B. • this strategy profile is [Select] (b) Consider the following strategy profile: Firm 1 chooses B; Firm 2 chooses fight if A, and don't fight if B. • this strategy profile is [Select ] (c) Consider the following strategy profile: Firm 1 chooses B; Firm 2 chooses don't fight if A and don't fight if B. • this strategy profile is [Select] F2
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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question and possible options attached
![elect]
not a Nash equilibrium
a Nash equilibrium, but not a subgame perfect Nash equilibrium
a subgame perfect Nash equilibrium
none of th](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3463a177-7def-4976-965f-4502bb575f7c%2F5b4f1566-95fe-4837-8d79-03ec5ba429e9%2F9g2rnpm_processed.png&w=3840&q=75)
Transcribed Image Text:elect]
not a Nash equilibrium
a Nash equilibrium, but not a subgame perfect Nash equilibrium
a subgame perfect Nash equilibrium
none of th
![Consider the following game. Firm 1 can implement one of two actions, A or B. Firm 2 observes the
action chosen by Firm 1 and then decides whether to fight it or not.
F2
.(-10, 20)
Fight
A
Don't fight
(30, 10)
Firm 1
(-10, 0)
Fight
B
Don't fight
-(20, 15)
(a) Consider the following strategy profile: Firm 1 chooses A; Firm 2 chooses fight if A, and fight if
B.
• this strategy profile is [Select ]
(b) Consider the following strategy profile: Firm 1 chooses B; Firm 2 chooses fight if A, and don't
fight if B.
• this strategy profile is [Select]
(c) Consider the following strategy profile: Firm 1 chooses B; Firm 2 chooses don't fight if A and
don't fight if B.
• this strategy profile is [Select]
F2](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3463a177-7def-4976-965f-4502bb575f7c%2F5b4f1566-95fe-4837-8d79-03ec5ba429e9%2Fatu6alo_processed.png&w=3840&q=75)
Transcribed Image Text:Consider the following game. Firm 1 can implement one of two actions, A or B. Firm 2 observes the
action chosen by Firm 1 and then decides whether to fight it or not.
F2
.(-10, 20)
Fight
A
Don't fight
(30, 10)
Firm 1
(-10, 0)
Fight
B
Don't fight
-(20, 15)
(a) Consider the following strategy profile: Firm 1 chooses A; Firm 2 chooses fight if A, and fight if
B.
• this strategy profile is [Select ]
(b) Consider the following strategy profile: Firm 1 chooses B; Firm 2 chooses fight if A, and don't
fight if B.
• this strategy profile is [Select]
(c) Consider the following strategy profile: Firm 1 chooses B; Firm 2 chooses don't fight if A and
don't fight if B.
• this strategy profile is [Select]
F2
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