Problem 4: Sequential Game Company A is considering whether to invest in infrastructure that will allow it to expand into a new market. Company B is considering whether to enter the market. Assume the companies now each other's payoffs. Use the decision tree below to answer the following questions. Result Enter B:2 A: 2 Invest Company B B:0 A:4 Don't enter Company A Enter В: 1 A: 1 Don't invest Company B B:0 A: 2 Don't enter Vhich company has the first-mover advantage in this game? (Select ] Company A invests, Company B's best response is ( Select ] At this outcome, Company B receives a payoff of ( Select ] Company A does not invest, Company B's best response is [ Select ) . At this outcome, Company B receives a payoff of (Select ] Does Company B have a dominant strategy? If so, what is it? ( Select ] Siven that the companies know each other's payoffs, Company A will choose to [Select] The outcome of the game will be that ( Select ]

Problem 4: Sequential Game Company A is considering whether to invest in infrastructure that will allow it to expand into a new market. Company B is considering whether to enter the market. Assume the companies now each other's payoffs. Use the decision tree below to answer the following questions. Result Enter B:2 A: 2 Invest Company B B:0 A:4 Don't enter Company A Enter В: 1 A: 1 Don't invest Company B B:0 A: 2 Don't enter Vhich company has the first-mover advantage in this game? (Select ] Company A invests, Company B's best response is ( Select ] At this outcome, Company B receives a payoff of ( Select ] Company A does not invest, Company B's best response is [ Select ) . At this outcome, Company B receives a payoff of (Select ] Does Company B have a dominant strategy? If so, what is it? ( Select ] Siven that the companies know each other's payoffs, Company A will choose to [Select] The outcome of the game will be that ( Select ]

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Refer to the accompanying payoff matrix. Which of the following is a Nash equilibrium? Company A Strategy 1 Strategy 2 Strategy 1 Company A's Profit: $8 million Company B's Profit: $9 million Company B Company A's Profit: $10 million Company B's Profit: $8 million None of the above, Strategy 2 Company B's Profit: $8 million Company A's Profit: $7 million Company B's Profit: $7 million Company A's Profit: $8 million Company A chooses Strategy 1 and Company B chooses Strategy 1. Company A chooses Strategy 2 and Company B chooses Strategy 2. Company A chooses Strategy 1 and Company B chooses Strategy 2. Company A chooses Strategy 2 and Company B chooses Strategy 1.
In the following games, all payoffs are listed with the row player's payoffs first and the column player's payoffs second. GAME 33 Player A Player B B1 10, 12 A1 A2 9,3 A3 8, 10 In Game 33 above, B2 B3 8,8 12, 10 7,6 11, 1 9,4 14, 3 B1 is a dominated strategy for Player B B2 is a dominated strategy for Player B B3 is a dominated strategy for Player B Player B has no dominated strategies.
Use the following payoff matrix for a simultaneous-move one-shot game to answer the accompanying questions. Player 2 Strategy C D E F Player 1 A 9, 8 14, 14 18, 25 12, 19 B 23, 13 10, 18 14, 26 19, 21 a. What is player 1’s optimal strategy? multiple choice Strategy B Strategy A Player 1 does not have an optimal strategy. b. Determine player 1’s equilibrium payoff. Prev
Consider the game with the payoffs below. Which of the possible outcomes are MORE efficient than the Nash Equilibrium (NE)? Note, they do NOT need to be Nash equilibria themselves, they just need to be more efficient than the NE. Multiple answers are possible, but not necessary. You need to check ALL correct answers for full credit. JILL High Medium LowMAGGIE Left 3,4 2,3 2,2Center 4,8 9,7 8,7Right 7,6 8,5 9,4Group of answer choices (Left, Low) There is no strategy combination that is more efficient than the Nash equilibrium for this game. (Right, Medium) (Left, High) (Center, Medium) (Center, High) (Center, Low) (Left, Medium) (Right, Low) (Right, High)
Suppose that Alex and Bob complete the project sequentially. Assume that Alex decides his effort level and starts the project first, and then Bob decides his effort level and finishes the project. Present the extensive-form representation of the game (i.e., draw a decision tree which is also referred as the game tree). What is your prediction regarding the outcome of the game? Explain your prediction.
Consider the following two-player game with three options for each player. (Payouts are listed for the row player first, then the column player.) player Y layery 3,3 A 1,5 4,4 6,2 K 8,1 3,7 5,2 0,6 1,1 Find a mixed Nash equilibrium for this game. Solution suggestion: Use two variables per player. If p and are the probabilities of selecting the first two strategies, then 1-p-q is the probability of selecting the third strategy. You will need to solve a system of equations.
Consider the following 2-player normal form game. Player 2 Bananas Orange Player 1 Grapes 11, 3 8, 2 Apple 9, 7 6, 5 Player 1's dominant strategy is [Select ] and Player 2's dominant strategy is [ Select ) The Nash Equilibrium of this game is ( Select ) (select all that apply).
Player 1 Cooperate (C) Defect (D) If the game has a dominant strategy, what is it? There is none. If the game has a Nash equilibrium in pure strategies, what is it? There is none. Cooperate (C) 3,3 8,0 Cooperate (C) is a dominant strategy for both players. Defect (D) is a dominant strategy for both players. Cooperate (C) is a dominant strategy for 1, and Defect (D) is a dominant strategy for 2. C, C is the only Nash equilibrium. D, D is the only Nash equilibrium. C, C and D, D are both Nash equilibria. Player 2 Defect (D) 0,8 1,1
Finding Nash Equilibria Consider the following two player, normal form game: Player 1 Player 2 C L (2,1) U M (-2,-2) D R (2, -1) (1,2) (-1, 1) (0,0) (3,1) (0,0) (-1,-1) Find all pure and mixed strategy Nash equilibria. Calculate each player's expected payoffs at each equilibrium.
Question > Consider the following matrix game where Player 1 moves first then Player 2 observes player 1's move and responds. Draw the game tree for the sequential move game and then determine all the Nash equilibria. Player 1 Strategy A Strategy B Strategy C Strategy D -3, -2 10, 12 9, 20 Player 2 Please show each step on how to get the answer. Thank you! Strategy E 13,7 17, 17 12, 21 Strategy F 20,8 22, 16 19, 19
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…
Problem 4: Consider an infinitely repeated game, where the base game is the following 2-person 2x2 game: A A 0,0 10, 10 S1: choose A always S2: choose B always B 10, 10 0,0 Assume both players discount the future at the same rate of r, 0 < r < 1. Limiting each player's strategies to the following six possibilities, S3: Choose A then mimic the other player's previous choice S4: Choose B, then mimic the other player's previous choice S5: Choose A, then choose the opposite of the other player's previous choice S6: Choose B, then choose the opposite of the other player's previous choice a. present the strategic form of this game, b. identify all pure-strategy Nash equilibria c. does repetition with these strategies "solve" the coordination dilemma that confronts the players in the single play of the above game.