References Mailings Review View Help In a one-shot game, if you advertise and your rival advertises, you will each earn $5 million in profits. If neither of you advertises, your rival will make $4 million and you will make $2 million. If you advertise and your rival does not, you will make $10 million and your rival will make $3 million. If your rival advertises and you do not, you will make $1 million and your rival will make $3 million. The profits in each cell are shown as (your profit, your rival's profit). a) Fill in the payoffs in the following table. ign Layout You Advertise Do Not Advertise Your Rival Advertise () Do Not Advertise b) Do you have a dominant strategy? Why or why not? c) Does your rival have a dominant strategy? Why or why not? d) What is the Nash equilibrium in this game?

References Mailings Review View Help In a one-shot game, if you advertise and your rival advertises, you will each earn $5 million in profits. If neither of you advertises, your rival will make $4 million and you will make $2 million. If you advertise and your rival does not, you will make $10 million and your rival will make $3 million. If your rival advertises and you do not, you will make $1 million and your rival will make $3 million. The profits in each cell are shown as (your profit, your rival's profit). a) Fill in the payoffs in the following table. ign Layout You Advertise Do Not Advertise Your Rival Advertise () Do Not Advertise b) Do you have a dominant strategy? Why or why not? c) Does your rival have a dominant strategy? Why or why not? d) What is the Nash equilibrium in 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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Consider the game in the table below. What is firm A's payoff from their best response to Firm B choosing Down? Firm A Left Straight Right Up 7,5 3,7 1,3 Firm B Middle 8,14 2,7 4,17 Down 9,13 1,3 2,16 16
Consider the following game. Firm 1 can implement one of two actions, A or B. Firm 2 observes the action chosen by Firm 1 and then decides whether to fight it or not. (-10, 20) F2 Fight A Don't fight -(30, 10) Firm 1 (-10, 0) Fight B Don't fight -(20, 15) (a) Consider the following strategy profile: Firm 1 chooses A; Firm 2 chooses fight if A, and fight if B. • this strategy profile is [Select] (b) Consider the following strategy profile: Firm 1 chooses B; Firm 2 chooses fight if A, and don't fight if B. • this strategy profile is [Select] O (c) Consider the following strategy profile: Firm 1 chooses B; Firm 2 chooses don't fight if A and don't fight if B. • this strategy profile is [Select] 00 F2 ()
Question 10 Laurel and Janet are competitors in a local market and each is trying to decide if it is worthwhile to advertise. If both of them advertise, each will earn a profit of $5,000. If neither of them advertise, each will earn a profit of $12,000. If one advertises and the other doesn't, then the one who advertises will earn a profit of $10,000 and the other will earn $2,000. In this version of the this game, if the game is played only once, then the Nash is a)for both to advertise. b)for both not to advertise. a only a and b b only none
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M7
In the used-car market in Sydney there are two types of cars: bad cars and good cars. Owners of the cars know what sort of car they have, but to potential buyer all cars look alike (until after they have already been bought). Owners of bad cars are willing to sell their cars for $1000. Owners of good cars are willing to sell their cars for $1600. Buyers have a maximum willingness to pay for a bad car of $1400 and a maximum willingness to pay for a good car of $2400. Buyers are risk neutral, so they maximise their expected return when considering their purchase. What is the minimum proportion (q") of good cars in the market such that the owners of the good cars are still willing to sell their cars? O None of the other answers are correct. O q* - 0.4 O 4* = 0.8 O q* = 0.2 O 4* = 0.6
1
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Game Theory / Economics
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