FIRM B Collude Collude Produce 20m Compete Produce 35m A: $200m profits A: $300m profits B: $170m profits Produce 30m B: $300m profits A: $50m profits A: $100m profits Compete Produce 50m B: $400m profits B: $200 profits Firms A and B have a choice to compete or collude with payoffs as shown above. The equilibrium outcome is Both A and B collude A competes and B colludes Both A and B compete There is no equilibrium outcome to the game A colludes and B competes

Using the chart, determine which bundle price will maximize net profit. Please show the steps to support yourconclusion.

1 Consider the two investments listed below with possible outcomes and probabilities: INVESTMENT (in $1000) P SAFE RISKY INVESTMENT AMOUNT 40+ 40+ GOOD SCENARIO OUTCOME 45+ 80+ AVERAGE+ SCENARIO PROB+ OUTCOME 0.40+ 0.40 42+ 45 BAD+ SCENARIO PROB OUTCOME PROB 0.20 35+ 0.20 10 0.40€ 0.40 a) What are the expected payoffs (E(x)) and standard deviations for each investment? b) Suppose I have utility function U(*) = √(x). What is the expected utility from each investment? c) Which investment will I choose, if any? Show and explain your work and provide the intuition.< d) What is the value of the risk premium for the SAFE investment? Show and explain your work and provide the intuition. e) What is the value of the risk premium for the RISKY investment? Show and explain your work and provide the intuition.< 43 A ✔ →

What P(s1) would the decision-maker be indifferent between the "buy" and "make" decisions, all other data input remaining the same?

Do not have any other ai use

Example 1: Zero Sum Game Game Table 2 Game Table 1 Player 2 Player 2 S1 S2 Si S2 RI (3,-3) (-5,5) Player 1 R1 3 -5 RI (0,0) (7,-7) R1 7 Player 1 All players payoff shown =) Fnd Nasn ewwliLtlun> zero sum shorthand

EOC 18.06 (and 18.07) Jim and Cheryl are competitors in a small town and each is trying to decide if it is worthwhile to advertise. If both of them advertise, each will earn a profit of $10, 000. If neither of them advertises, each will earn a profit of $20,000. If one advertises and the other doesn't, then the one who advertises will earn a profit of $30,000 and the other will earn $14,000. What is the Nash equilibrium in this game? Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a Neither of them should advertise. b Both of them should advertise. There is no unique Nash equilibrium for this game. d Jim should advertise and Cheryl should not advertise.

Question Completion Status: Gekko QUESTION 8 Good Quality a Poor Quality SERDE 1 INSGE 19 2 Good Quality Wonka 10 Gekko = 10 Wonka = 12 Gekko = 9 1 Wonka Refer to Table 17-7. Wonka and Gekko agree to cooperate so as to maximize total profit. If this game is played repeatedly and Wonka uses a tit- strategy, it will choose a O a. good quality product in the first round and in subsequent rounds it will choose whatever Gekko chose in the previous round. O b. poor quality product in all rounds, regardless of the choice made by Gekko. C. good quality product in all rounds, regardless of the choice made by Gekko. d. poor quality product in the first round and in subsequent rounds it will choose whatever Gekko chose in the previous round. Poor Quality Wonka = 9 Gekko = 12 Click Save and Submit to save and submit. Click Save All Answers to save all answers. Wonka = 11 Gekko = 11 O Pleshow! www 0 R Aa

which one is the correct answer

Julia and Julia is a small, owner-operated bakery. The owner of Julia & Julia is considering two alternative investments, X and Y. There are four possible outcomes for each (1,2,3 and 4 for Investment X and A, B, C, D for Investment Y). Investment X Investment Y Outcome Payoff Payoff Probability 0.2 Outcome Probability 1 A 0.1 2 2 0.2 B 30 0.2 12 0.4 1 0.5 4 14 0.2 14 0.2 (a) To one decimal place (e.g. 3.5), what are the expected values of Investment X and of Investment Y? The expected value of X is The expected value of Y is Say the owner's utility function is given by U (Z) = VZ where U is the utility and Z is X or Y. (b) Is the owner risk averse? O Yes O No (c)Which investment will the owner choose? OInvestment X Investment Y