Give two examples other than oligopoly that can beexplained by the logic of the prisoners’ dilemma.

Give two examples of a prisoner's dilemma that involves more than two players

What is the prisoner's dilemma, and what does it have to do with oligopoly?

None

Sometimes oligopolies in the same industry are very different in size. Suppose we have a duopoly where one firm (Firm A) is large and the other firm (Firm B) is small, as the prisoner’s dilemma box in Table shows Assuming that both firms know the payoffs, what is the likely outcome in this case?

If the members of an oligopoly could agree on a total quantity to produce, what quantity would they choose? If the oligopolists do not act together but instead make production decisions individually, do they produce a total quantity more or less than in your answer to the previous question? Why?

Two players, Player 1 and Player 2, are playing a repeated prisoner's dilemma. Payoffs are described in the following matrix. Answer which statement is correct: Player 2 A B Player 1 A 10, 10 1,150 B 150, 1 2,2 Select one: a. A tit-for-tat strategy will support (A,A) as an equilibrium if 8 > 0.7 ○ b. A tit-for-tat strategy will C. ○ d. d. never support (A,A) as an equilibrium. A trigger strategy will never support (A,A) as an equilibrium. A trigger strategy will support (A,A) as an equilibrium if 8 > 0.7

Two duopolists are sharing a market in which they are contemplating whether to compete or to cooperate. If they cooperate and behave like a monopolist they will share the monopolist profit of $1800. If they compete each will get a profit of $800 but if one them cooperates while the other chooses to compete the one who cooperates gets $700 while the one who competes will end up with $1000. Set-up the game, explain the process and show the Nash-equilibrium reached when the game is played.

A duopoly faces an inverse market demand of: p= 390 - 341 - 392. You are told that firm 1 is the leader and firm 2 is the follower. Otherwise the firms are identical, each with a constant marginal cost of $90. What oligopoly model will you use to analyze this market? The Stackelberg model At the Nash equilibrium, firm 1 will produce 60.0 units. (Round your answer to one decimal place.) At the Nash equilibrium, firm 2 will produce 30.0 units. (Round your answer to one decimal place.)

Macmillan Leaming Monopolistic Competition, Oligopoly and Game Theory End of Chapter Problems Low-fare carriers such as Spirit, Allegiant, and Frontier have been successful at gaining market share by offering low base fares but then charging for everything from seat assignments to snacks to carry-on bags. What action would you recommend to the major airlines (Delta, United, and American) to avoid a prisoners' dilemma outcome? The major airlines should: Merge together to form a single competing airline, which would create cost savings and economies of scale. Decrease the prices of all their tickets so as to compete with the low-fare carriers. Break up their companies into more numerous firms, which would provide greater competition to the low-fare carriers. Create a new class of tickets that will be priced lower and offer fewer amenities, which would compete directly with the low-fare carriers.