• Japan's Elpida Memory entered court management and was acquired by Micron. The media reportedthat it was the result of the semiconductor chicken game.• Question (a) Where is the Nash Equilibrium?• Question (b) What is the mixed-strategy equilibrium?• Question (c) What is the probability of a chicken game?ElpidaQuantityMaintainQuantityIncrease(1-y)QuantityMaintain(x)10, 19, 2SamsungQuantityIncrease(1-x)12, -17, -1.4operating profit(trillion won)

There are two players and two strategies. Players chooses highest payoffs for themselves . For…

Answered: Japan's Elpida Memory entered court…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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5. The following problem was first considered by John von Neumann and is a fundamentalresult game theory.A and B play the following game:A writes down either number 1 or number 2, and B must guess which one.If the number that A has written down is i and B has guessed correctly, B receives i units from A.If B makes a wrong guess, B pays 4/5 of a unit to A.First we consider the expected gain of player B.Suppose B guesses 1 with probability p and 2 with probability 1 −p.Let X1 denote B’s gain (or loss) in a game where A has written down 1.Let X2 denote B’s gain (or loss) in a game where A has written down 2.(a) Find the pmf of X1 and X2(b) Find B’s expected gain for these two cases, E[X1] and E[X2].(c) What value of p maximizes the minimum possible value of B’s expected gain?Now consider the expected loss of player ASuppose that A writes down 1 with probability q and 2 with probability 1 −q.Let Y1 be A’s loss (or gain) if B chooses number 1.Let Y2 be A’s loss (or gain) if B…
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