Section III : Suppose Tesla and Toyota have the following payoff matrix: Toyota Produce EV cars Produce EV cars TM TB 70 50 Produce internal combustion 40 80 Cars Tesla Produce internal combustion cars ПМ TB 60 60 90 30 Since this is a zero-sum (constant-sum) game you can narrow the matrix by only using payoff information for Toyota. a.) Use this narrow matrix that only includes the column entries for Toyota to determine whether it is possible to find a dominant strategy for either firm to derive a solution to this game when using a pure strategy approach. b.) Now, suppose Toyota chooses a maximin strategy and Tesla chooses a minimax strategy. Is there a pure strategy solution when using these strategies? Please explain fully and show all of your work. c.) Given the information presented in the narrow payoff matrix calculate the expected profit (p-mix) equations for Toyota. Also, draw the appropriate graph that shows the expected payoffs for Toyota if Tesla chooses to produce EV cars or chooses to produce internal combustion cars. That graph should present two linear equations.
Section III : Suppose Tesla and Toyota have the following payoff matrix: Toyota Produce EV cars Produce EV cars TM TB 70 50 Produce internal combustion 40 80 Cars Tesla Produce internal combustion cars ПМ TB 60 60 90 30 Since this is a zero-sum (constant-sum) game you can narrow the matrix by only using payoff information for Toyota. a.) Use this narrow matrix that only includes the column entries for Toyota to determine whether it is possible to find a dominant strategy for either firm to derive a solution to this game when using a pure strategy approach. b.) Now, suppose Toyota chooses a maximin strategy and Tesla chooses a minimax strategy. Is there a pure strategy solution when using these strategies? Please explain fully and show all of your work. c.) Given the information presented in the narrow payoff matrix calculate the expected profit (p-mix) equations for Toyota. Also, draw the appropriate graph that shows the expected payoffs for Toyota if Tesla chooses to produce EV cars or chooses to produce internal combustion cars. That graph should present two linear equations.
Chapter1: Making Economics Decisions
Section: Chapter Questions
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Transcribed Image Text:Section III : Suppose Tesla and Toyota have the following payoff matrix:
Toyota
Produce EV cars
Produce EV cars
TM
лв
70
50
Produce internal combustion 40 80
Cars
Tesla
Produce internal combustion cars
ПМ
TB
60
60
90
30
Since this is a zero-sum (constant-sum) game you can narrow the matrix by only using payoff
information for Toyota.
a.) Use this narrow matrix that only includes the column entries for Toyota to determine whether it is
possible to find a dominant strategy for either firm to derive a solution to this game when using a
pure strategy approach.
b.) Now, suppose Toyota chooses a maximin strategy and Tesla chooses a minimax strategy. Is
there a pure strategy solution when using these strategies? Please explain fully and show all of
your work.
c.) Given the information presented in the narrow payoff matrix calculate the expected profit (p-mix)
equations for Toyota. Also, draw the appropriate graph that shows the expected payoffs for
Toyota if Tesla chooses to produce EV cars or chooses to produce internal combustion cars. That
graph should present two linear equations.
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