Problem 3: Oligopoly PricingX and Y are two oligopolists who are trying to decide on how best to price their product.Refer to the profit payoff matrix and answer the following questions. All profit figures are inthousands.X's possible prices$40$35$57$59A$60$55$50$55$69$58Does Firm X have a dominant strategy? If so, what is it? [Select ]Does Firm Y have a dominant strategy? If so, what is it? [Select ]Is there a Nash Equilibrium? If so, which quadrant? [ Select ]Y's possible prices$35$40

Yes, here both players has dominant strategy. Firm X's preferred approach is $35. Since the…

Answered: Does Firm X have a dominant strategy?…

Does Firm X have a dominant strategy? If so, what is it? [ Select] Does Firm Y have a dominant strategy? If so, what is it? [Select ] Is there a Nash Equilibrium? If so, which quadrant? [ Select ]

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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7. Solving for dominant strategies and the Nash equilibrium Suppose Rajiv and Simone are playing a game in which both must simultaneously choose the action Left or Right. The payoff matrix that follows shows the payoff each person will earn as a function of both of their choices. For example, the lower-right cell shows that if Rajiv chooses Right and Simone chooses Right, Rajiv will receive a payoff of 5 and Simone will receive a payoff of 5.
Q17
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. (-10, 10) Firm 1 A B F2 • this strategy profile is F2 Fight Don't fight Fight Don't fight [Select] (20, 15) (a) Consider the following strategy profile: Firm 1 chooses A; Firm 2 chooses don't fight if A, and fight if B. (-10, 30) (25, 15) • this strategy profile i✓ [Select ] (b) Consider the following strategy profile: Firm 1 chooses A; Firm 2 chooses don't 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 fight if A and fight if B. not a Nash equilibrium a Nash equilibrium, but not a subgame perfect Nash equilibrium a subgame perfect Nash equilibrium none of the above
Time remaining: 00:09:51 Economics The market demand function is Q=10,000-1,000p. Each firm has a marginal cost of m=$0.16. Firm 1, the leader, acts before Firm 2, the follower. Solve for the Stackelberg-Nash equilibrium quantities, prices, and profits. Compare your solution to the Cournot-Nash equilibrium. The Stackelberg-Nash equilibrium quantities are: q1=___________ units and q2=____________units The Stackelberg-Nash equilibrium price is: p=$_____________ Profits for the firms are profit1=$_______________ and profit2=$_______________ The Cournot-Nash equilibrium quantities are: q1=______________units and q2=______________units The Cournot-Nash equilibrium price is: p=$______________ Profits for the firms are profit1=$_____________ and profit2=$_______________
9
Player 2 Middle Left P1: $45 P1: $70 Up P2: $45 P2: $50 Player 1 P1: $50 P1: $60 Middle P2: $50 P2: $60 P1: $60 P1: $50 Down P2: $60 P2: $70 In the game shown above, list all of the Nash Equilibrium (please check ALL that apply) (up, left) (up, middle) (up, right) (middle, left) (middle, middle) (middle, right) (down, left) (down, middle) (down, right) No equilibrium Right P1: $45 P2: $60 P1: $50 P2: $70 P1: $60 P2: $60
Refer to the images 'Facebook versus Google Plus'. And answer the question below Why did Google Plus fail as a social networking site?
9. For the payoff matrix below, consider a sequential version of the game in which Player 2 moves first and then Player 1 moves second. Which of the following is not a correct statement? Player 1 Top Center Bottom Left 1,2 5,1 6,0 Player 2 Middle 7,1 11,2 -4,3 Right 10,4 1,0 8,5 The subgame perfect payoffs coincide with those of a Nash equilibrium b. Depending on Player 2's move, Player 1 will sometimes optimally choose Bottom c. Player 2 will choose Right in the subgame perfect equilibrium d. Player 2 would be willing to pay a positive $ amount to move first rather than second e. Player 1 would be willing to pay a larger $ amount than Player 2 to move first
The question is intermediate microeconomics
q19 If you advertise and your rival advertises, you each will earn $4 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 $1 million and the non-advertising firm will earn $5 million. If you and your rival plan to be in business for 10 years, then the Nash equilibrium is a. for each firm to not advertise in any year. b. for neither firm to advertise in early years but to advertise in later years. c. for each firm to advertise every year. d. for each firm to advertise in early years but not advertise in later years.
QUESTION 12 This is a HOT SPOT question. You will need to evaluate the picture of the game below, and answer the question by clicking on a specific area (the hot spot) of the picture. Question: Are there any dominant strategies in this game? If there are, click on the box that corresponds to that dominant strategy (either UP, DOWN, LEFT, or RIGHT). If there aren't any anywhere outside of these boxes. If there are dominant strategies for both players, clicking on only one of them will suffice. Player 1 Player 2 Selected Coordinates Clear UP DOWN LEFT 45, 80 70, 100 RIGHT 50, 150 60, 60
60B- What is the Nash equilibrium for this game and identify the profit each player gets at this solution 5 m