Suppose that Jason and Chad each are thinking of opening up a diet coke stand on the fourth floor of this building. Suppose thatpotential customers are evenly spaced on a distance that is normalized to 1. Customers will buy a diet coke from whicheverstand requires the least walking. If they are the same distance the customer will flip a coin. This is depicted below.1/41/23/4Suppose that Jason and Chad are simultaneously choosing the location of their stands, what is the Nash Equilibrium location?a. One of them puts a stand at 3/4 and the other puts a stand at 1/4b. Chad and Jason put their stands right next to each other at 1/2c. One of them puts a stand at 0 and the other puts a stand at 1d. There is no Nash Equilibrium

If one seller puts a stand at ¾ and other at ¼, the consumers near to them would be attracted to…

Answered: Suppose that Jason and Chad each are…

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter22: Frontiers Of Microeconomics

Section: Chapter Questions

Problem 6PA

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2. There are two ice-cream stores, each of whom chooses a position from ten spots along the beach: spot 1, 2, 3, ...10. The ten spots are lined up and separated 100 meters from each other. 1 2 3 4 5 6 7 8 9 10 The consumers are equally distributed across these ten spots. Consumers buy from the store whose spot is closest to theirs. If the two stores are equidistant from a given spot, the consumers at that position split their consumption equally. The aim of the ice-cream stores is to maximize their share of the total ice-cream consumption. a. Is there any dominated strategy? If so, spell out explicitly how one strategy is dominated by another strategy. b. Is there any iterated dominance equilibrium?
. Arif and Aisha agree to meet for a date at a local dance club next week. In their enthusiasm, they forget to agree which venue will be the site of their meeting. Luckily the town has only two dancing venues, Palms and Oasis. Having discussed their tastes in dancing venues last week, both know that Arif prefers Palms to the Oasis and Aisha prefers the Oasis to Palms. In fact, their payoffs reflect that if both go to Oasis, Aisha’s utility is 3 and Arif’s 2, while if both go to Palms Arif’s utility is 3 and Aisha’s is 2. If they do not go to the same venue, then they both have a utility of 0Please calculate mixed strategy equilibria, if any, and then derive the probability that Arif and Aisha will find themselves at the same venue.
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Suppose that Jason and Chad each are thinking of opening up a diet coke stand on the fourth floor of this building. Suppose that potential customers are evenly spaced on a distance that is normalized to 1. Customers will buy a diet coke from whichever stand requires the least walking. If they are the same distance the customer will flip a coin. This is depicted below. 1/4 1/2 3/4 If Jason is currently at 3/4, what is Chad's best response? a. Just left of 3/4 b. 1/2 c. Just right of 3/4 d. Just left of 1/2
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Cooper and Rebecca run the only two lawncare companies in a small town. If they worked independently, they would each earn $3000. If they cooperated, they know they could raise the price of their lawncare services and service fewer lawns, but can each earn $4500. If one person raises prices and other does not, the person who raises prices will earn $1000 and the other will earn $6000. Draw a table representing their dilemm

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