Match the definition to each term listed below.Number1234567891011DefinitionA table that shows the payoffs each firm earns from every combination of firm strategiesAn agreement among firms to charge the same price or otherwise not to competeAn option that is better than any alternative option regardless of what the other firm doesAn outcome of a strategic game from which neither rival wants to deviateA game outcome in which players seek to increase their mutual payoffA practice where one firm initiates a price change and the other firms follow the leaderA game in which the firms choose their strategies at the same timeOne firm's gain must equal the other firm's lossA game in which the sum ofFirms select their optimal strategies in a single time period without regard to possibleinteractions in subsequent time periodsA game that occurs more than oncethe two firms' outcomes is positiveInstructions: Enter a numeric response corresponding to the number of the definition listed above.a. A repeated game:b. Cooperative equilibrium:c. Simultaneous game:d. Payoff matrix:e. Nash equilibrium:5

To match the definitions with their corresponding numbers, simply read each definition and then…

Instructions: Enter a numeric response corresponding to the number of the definition listed above. a. A repeated game: b. Cooperative equilibrium: c. Simultaneous game: d. Payoff matrix: e. Nash equilibrium: 5

Instructions: Enter a numeric response corresponding to the number of the definition listed above. a. A repeated game: b. Cooperative equilibrium: c. Simultaneous game: d. Payoff matrix: e. Nash equilibrium: 5

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Match the definition to each term listed below.
Number
1
2
3
4
5
6
7
8
9
10
11
Definition
A table that shows the payoffs each firm earns from every combination of firm strategies
An agreement among firms to charge the same price or otherwise not to compete
An option that is better than any alternative option regardless of what the other firm does
An outcome of a strategic game from which neither rival wants to deviate
A game outcome in which players seek to increase their mutual payoff
A practice where one firm initiates a price change and the other firms follow the leader
A game in which the firms choose their strategies at the same time
One firm's gain must equal the other firm's loss
A game in which the sum of
Firms select their optimal strategies in a single time period without regard to possible
interactions in subsequent time periods
A game that occurs more than once
the two firms' outcomes is positive
Instructions: Enter a numeric response corresponding to the number of the definition listed above.
a. A repeated game:
b. Cooperative equilibrium:
c. Simultaneous game:
d. Payoff matrix:
e. Nash equilibrium:
5

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Two rival companies competing in the same market need to decide their plans for future expansion of their stores. The Table below shows the possible outcomes of their mutually interdependent actions (payoffs are profits in £m) Giga Company Titanic Conglomerate No Change Refurbishment of existing stores Large Expansion No Change 30, 40 25, 35 15, 24 Refurbishment of existing stores 35, 30 28, 32 18, 33 Large Expansion 12, 22 18, 20 20, 25 The Nash equilibrium: (A) does not exist. (B) occurs when both firms choose Refurbishment of existing stores. (C) occurs when both firms choose Large Expansion. (D) occurs when both firms choose No Change.
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rituo? A. Identify the pure-strategy Nash equilibrium/a in the game below, and identify the Pareto efficient strategy combinations. (You may simply state these, you do not need to show how you derived your answer.) B. Identify the mixed-strategy equilibrium to the game. Show your work. You may use the equations from the "generic" 2X2 game if you wish. Doing it the long way is fine, however. C. State the payoff for each player in the mixed-strategy equilibrium. Is the mixed-strategy combination Pareto efficient? Player 1 U D 20 Player 2 L (10,15) (1,5) R (0,6) (1,6)
Player 1 Cooperate (C) Defect (D) Cooperate (C) 3,3 8,0 Player 2 Defect (D) 0,8 1,1 In general, a combination of strategies is a Nash equilibrium if ... Every player is choosing a best response against the other players' strategies. Every player has a positive payoff. The players maximize the sum of their payoffs. The players choose identical strategies. If the game is repeated, which cooperative actions could benefit both players? O Both players choose C. Player 1 chooses C, Player 2 chooses D. O Player 1 chooses D, Player 2 chooses C. Both players choose D.
None
1. Consider the following normal form game. X Y (a) What is the set of rationalizable strategies for this game? Player 1 Player 2 W Q 1,7 1,5 2,3 Z 3,4 0,4 0,6 R= (b) The game has only one Nash equilibrium and it is a mixed strategy Nash equilibrium. Compute and report this equilibrium. Equil. strategy profile:
40