Consider the following manufacturer-distributor coordination game. Manufacturer Product Update/Higher MSRP No Update/Same MSRP Distributor Discontinue Special Selling Services Continue Special Selling Services $3 M, $0 M $12 M, $6 M $6 M, $18 M $0 M, SO M Which of the following sets of strategies are Nash equilibria? Check all that apply. 00000 (Discontinuep with Probability 0.45, Update with Probability = 0.4) (Discontinuep, No Update) M (Continuep, Update) (DiscontinueD, Update M (Discontinuep with Probability = 0.75, Update with Probability = 0.8) (Continuep, No Update True or False: The manufacturer can secure higher expected profit by entering into a relational contract with the distributor. False True
Consider the following manufacturer-distributor coordination game. Manufacturer Product Update/Higher MSRP No Update/Same MSRP Distributor Discontinue Special Selling Services Continue Special Selling Services $3 M, $0 M $12 M, $6 M $6 M, $18 M $0 M, SO M Which of the following sets of strategies are Nash equilibria? Check all that apply. 00000 (Discontinuep with Probability 0.45, Update with Probability = 0.4) (Discontinuep, No Update) M (Continuep, Update) (DiscontinueD, Update M (Discontinuep with Probability = 0.75, Update with Probability = 0.8) (Continuep, No Update True or False: The manufacturer can secure higher expected profit by entering into a relational contract with the distributor. False True
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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jwsss not use ai
Transcribed Image Text:Consider the following manufacturer-distributor coordination game.
Manufacturer
Product Update/Higher MSRP No Update/Same MSRP
Distributor
Discontinue Special Selling Services
Continue Special Selling Services
$3 M, $0 M
$12 M, $6 M
$6 M, $18 M
$0 M, SO M
Which of the following sets of strategies are Nash equilibria? Check all that apply.
00000
(Discontinuep with Probability 0.45, Update with Probability = 0.4)
(Discontinuep, No Update)
M
(Continuep, Update)
(DiscontinueD, Update M
(Discontinuep with Probability
=
0.75, Update with Probability = 0.8)
(Continuep, No Update
True or False: The manufacturer can secure higher expected profit by entering into a relational contract with the distributor.
False
True
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