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- Initial Post. Due Wednesday -- 2 Comments Due Friday

- Initial Post. Due Wednesday -- 2 Comments Due Friday

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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# Chapter 15 - Oligopoly and Antitrust Policy / Chapter 20 - Game Theory, Strategic Decision Making, and Behavioral Economics ## Initial Post Due Wednesday – 2 Comments Due Friday ### 1) Define Cartel and give an example. ### 2) Thelma and Louise are being charged for a murder/robbery. They are separated by police and interrogated. They are given the choice to confess or not to confess. The payoff matrix below identifies the years that they will each spend in jail, for the various outcomes. #### Payoff Matrix for Thelma and Louise | | Thelma Confess | Thelma Don't Confess | |---------------|----------------|----------------------| | **Louise Confess** | 10, 10 | 2, 15 | | **Louise Don't Confess** | 15, 2 | 3, 3 | a. Identify the Dominant Strategy for either player, or state that there isn’t one. Remember, a “Strategy” is the player's move. In this example, state “Confess” or “Don’t Confess” for each player, not the payoff. b. Identify the Nash Equilibrium. ### 3) Amazon and Target both sell the new Xbox, and have a choice whether to charge a high price or a low price. The payoff matrix identifies the profit either store can expect to make (in millions of dollars). #### Payoff Matrix for Amazon and Walmart | | Amazon High Price | Amazon Low Price | |----------|-------------------|------------------| | **Walmart High Price** | 3, 6 | 2, 8 | | **Walmart Low Price** | 5, 5 | 4, 3 | a. Identify the Dominant Strategy for either player, or write “none” if there isn’t one. b. Identify the Nash Equilibrium.
Transcribed Image Text:# Chapter 15 - Oligopoly and Antitrust Policy / Chapter 20 - Game Theory, Strategic Decision Making, and Behavioral Economics ## Initial Post Due Wednesday – 2 Comments Due Friday ### 1) Define Cartel and give an example. ### 2) Thelma and Louise are being charged for a murder/robbery. They are separated by police and interrogated. They are given the choice to confess or not to confess. The payoff matrix below identifies the years that they will each spend in jail, for the various outcomes. #### Payoff Matrix for Thelma and Louise | | Thelma Confess | Thelma Don't Confess | |---------------|----------------|----------------------| | **Louise Confess** | 10, 10 | 2, 15 | | **Louise Don't Confess** | 15, 2 | 3, 3 | a. Identify the Dominant Strategy for either player, or state that there isn’t one. Remember, a “Strategy” is the player's move. In this example, state “Confess” or “Don’t Confess” for each player, not the payoff. b. Identify the Nash Equilibrium. ### 3) Amazon and Target both sell the new Xbox, and have a choice whether to charge a high price or a low price. The payoff matrix identifies the profit either store can expect to make (in millions of dollars). #### Payoff Matrix for Amazon and Walmart | | Amazon High Price | Amazon Low Price | |----------|-------------------|------------------| | **Walmart High Price** | 3, 6 | 2, 8 | | **Walmart Low Price** | 5, 5 | 4, 3 | a. Identify the Dominant Strategy for either player, or write “none” if there isn’t one. b. Identify the Nash Equilibrium.
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