Is there a Nash Equilibrium for this game? If so, what is it?O The Nash Equilibrium is for both first to choose the high price.O The Nash Equilibrium is for both first to choose the low price.O The Nash Equilibrium is for Chevron to choose the high price while Shell chooses the low price.O The Nash Equilibrium is for Shell to choose the high price while Chevron chooses the low price.O There is no Nash Equilibrium for this game. A small town has only two gas stations, Chevron and Shell. Daily, each station mustsimultaneously display their prices, choosing between a high price and low price. Assumeboth firms know their potential payoffs and this is a one-time game (both firms are onlyinterested in today's profit). The payoff matrix for this game, showing potential dailyprofit, is displayed below.Chevron DecisionsHigh PriceLow PriceS: $5,000C: $5,500S: $1,000C: $8,000High PriceShell DecisionsS: $7,500C: $1,500S: $3,000C: $2,800Low Price

To check the Nash equilibrium: Both Shell & Chevron have dominant strategies choosing the low…

Is there a Nash Equilibrium for this game? If so, what is it? The Nash Equilibrium is for both first to choose the high price. O The Nash Equilibrium is for both first to choose the low price. The Nash Equilibrium is for Chevron to choose the high price while Shell chooses the low price. O The Nash Equilibrium is for Shell to choose the high price while Chevron chooses the low price. O There is no Nash Equilibrium for this game.

Is there a Nash Equilibrium for this game? If so, what is it? The Nash Equilibrium is for both first to choose the high price. O The Nash Equilibrium is for both first to choose the low price. The Nash Equilibrium is for Chevron to choose the high price while Shell chooses the low price. O The Nash Equilibrium is for Shell to choose the high price while Chevron chooses the low price. O There is no Nash Equilibrium for this game.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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6.
QUESTION 1 Consider a simultaneous game where player A has a dominant strategy and player B has two strategies (none of which is a dominant strategy). How many pure strategy Nash equilibria will this game have? O Either 1 or 2 O Exactly 2 O Exactly 1 O None
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Why is a solution that we find through backward induction always a subgame perfect Nash equilibrium? O The results of backward induction are the only possible Nash equilibria. O The backward induction solution maximizes the combined payoffs of all players. O At each decision node, backward induction chooses the best option going forward for the player who moves at that point. O When we use backward induction, we only consider dominant strategies. Show your steps please.
Which of the following accurately describes a player's strictly dominant strategy? O It is a strategy that is better than all the player's other strategies, no matter what the other players do. There is always at least one player who has one in every game.. O It is the strategy a player uses in the Nash equilibrium of a game. Since a Nash equilibrium always exists, players always have a strictly dominant strategy. O It is a strategy that is better than all the player's other strategies, no matter what the other players do. A player may or may not have one. O It is a strategy that is better than all the player's other strategies, no matter what the other players do. Every player has a dominant strategy in every game.. O It is the strategy a player uses in the Nash equilibrium of a game. Since a Nash equilibrium may not exist, players may not always have a strictly dominant strategy.
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4. The following payoff matrix shows the profit payoff to firms A and B from combinations of price strategies HI and LO. A НІ LOW B HI (6, 6) (16, -5) LOW (-7, 15) (0, 0) (a) In a one period game, what strategy would each firm follow, and why? Determine the equilibrium on the one-period game. (b) Now assume the game is infinite in length. Firm B goes HI in period 1 and continues with HI so long as A does as well. Firm A is deciding between HI and LO. Determine the range of discount rates for which HI is the better choice for Firm A.
in this game table, Pepsi's payout is on the left and Sam's Choice's is on the ight. Is the Nash equilibrium a prisoner's dilemma? Pepsi High Low Sam's Choice High 110, 20 60, 10 Low 80, 40 70, 30 O No, it is not because both firms played their dominant strategies. O Yes, it is because the combined payoff for the two firms is lower than another outcome. O Yes, it is because at least one of the firms ends up with the lowest possible payoff. O No, it is not because at least one firm has achieved its highest possible payoff.
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Little Kona is a small coffee company that is considering entering a market dominated by Big Brew. Each company's profit depends on whether Little Kona enters and whether Big Brew sets a high price or a low price: Little Kona True True or False: Only Little Kona has a dominant strategy in this game. False Big Brew High Price Low Price Enter $2 million, $3 million $2 million, $1 million Don't Enter 50, 58 million $0, $3 million Which of the following outcomes represent a Nash equilibrium in this case? Check all that apply. Big Brew maintains a high price and Little Kona does not enter. Big Brew maintains a low price and Little Kona does not enter. Big Brew maintains a high price and Little Kona enters. Big Brew maintains a low price and Little Kona enters. Big Brew threatens Little Kona by saying, "If you enter, we're going to set a low price, so you had better stay out." Thin True or False: Little Kona should believe the threat.
Wal-Mart's dominant strategy is to pick a price of $. Target Price = $30 Price = $17 %3D What is the Nash equilibrium for this game? $6,000 $1,500 O A. The Nash equilibrium is for Target to choose a price of $17 and Wal-Mart to choose a price of $30. Price = $30 $6,000 $11,000 O B. The Nash equilibrium is for Target and Wal-Mart to both choose a price of $30. Wal - Mart C. The Nash equilibrium is for Target to choose a price of $30 and Wal-Mart to choose a price of $17. $11,000 $4,500 Price = $17 %3D $1,500 $4,500 O D. The Nash equilibrium is for Target and Wal-Mart to both choose a price of $17. South OE. O E. A Nash equilibrium does not exist for this game.