Consider the following normal form representation of the standard competition between firm A andfirm B. Each firm can choose either standard A or standard B. Their payoffs are given as follows:Firm BAВAFirm AВ1131(1) (10 points) What's Nash equilibrium (NE) in this game? If there are more than one, find themall. But there is no NE, state that there is no NE.(2) (10 points) If you find a NE (or multiple Nash equilibria), is it (or are they) Pareto efficient?

Nash equilibrium is such an equilibrium from where no player has any incentive to change its…

Answered: Consider the following normal form…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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There are three players in this simultaneous move game. Player-3 chooses between game A and game B. Player-1 chooses between U, M and D. Player-2 chooses between L and R. The payoffs are given below: P-1 U M D A P-2 L R 5,5,0 1,4,0 6,4,5 2,5,3 3,1,2 3,3,1 Find all pure strategy N.E. of this game. P-1 U M D L 4,8,0 4,1,3 3,5,1 B P-2 R 2,1,0 3,3,3 0,3,0
2 firms are engaged in Cournot competition; firm A faces the cost curveCA(yA)=40yAand firm Bfaces the cost curveCB(yB)=40yB. The inverse market demand curve isP(y)=100y, whereyrepresents market level of output. a)Define the Cournot game. b)In 1 or 2 sentences explain why a firm has no incentive to deviate from the Cournot Nash equilibrium(holding their opponent’s strategy constant). c)Find the Cournot Nash Equilibrium. d)Now suppose instead of playing their strategies at the same time, firm A moves first and then firm B moves second(sequentialgame).Does firm A earn higher profits in this game or the game in part c)?
Imagine that firm X chooses their quantity first, then firm Y observes the quantity of firm X and chooses their own quantity. What is the subgame perfect Nash Equilibrium? Is there a first or second-mover advantage here? You don't need to draw the whole game tree but you should give some kind of explanation for how you came to this equilibrium. (You may assume that firm X can only choose quantities that are multiples of 200. This prevents you from having to deal with prices that are not on the schedule and makes firm Y's strategy easier to write. )
Consider the game in the table below. Is the Nash Equilibrium efficient? Enter 111 for YES and 222 for NO. firm a left right firm b up 9,5 10,6 down 6,10 7,9
Q16
This table shows the payoffs for a game played between two players, A and B. B Left Center Right B = 4 B = 2 В - 1 Up A = 1 A = 6 A = 3 B = 2 B = 6 B = 7 A Middle A = 2 A = 4 A = 5 B = 2 B = 5 B = 3 Down A = 3 A = 5 A = 4 Refer to Table 17-8. Which of the following outcomes represents a Nash equilibrium in the game? a. Middle-Right b. Up-Center c. Down-Left d. Down-Center O O O O
V4
Economics Alpha and Beta are the only firms selling gyros in the upscale town of Delphi. Each firm must decide on whether to offer a discount to students to compete for customers. If one firm offers a discount but the other does not then the firm that offers the discount will increase its profit. The figure shows the payoff matrix for this game. Alpha Offer Don't offer Alpha eams S60,000 Alpha eams $20,000 What is the Nash equilibrium in this game? Offer Bota earns $60,000 Bota earns $100.000 O A. There is no Nash equilibrium Beta Alpha earns $100.000 Alpha earms $80,000 O B. Beta offers a student discount but Alpha does not Don't OC. Both Alpha and Beta offer a student discount Beta eams $20,000 Beta earns $80,000 offer O D. Alpha offers a student discount but Beta does not
Consider the game matrix given here:a. If (T,L) is a dominant strategy equilibrium, then what inequalities must hold among a,...,h?b. If (T, L) is a Nash equilibrium, then which of the above inequalities must be satisfied?
(J)
We can see from the payoff matrix that there are no pure strategy Nash equilibrium in this game because at least one firm would always have an incentive to change its behavior. From Nash's theorem, we know there must be at least one Nash equilibrium so there must be a mixed strategy Nash equilibrium for this game. Find the mixed strategy Nash equilibrium by first deleting all dominated strategies in the game What's the expected payoff to Firm 1 in the equilibrium?
None

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