Suppose that Panasonic and LG are the only two firms that can produce a new type ofholographic TV. The payoffs (in millions of dollars) from entering this product market are shown inthe payoff matrix to the right.If both firms move simultaneously, does either firm have a dominant strategy?A. Both firms have a dominant strategy, which is to enter.B. Neither firm has a dominant strategy.C. Both firms have a dominant strategy, which is not to enter.D. Panasonic has a dominant strategy, which is not to enter, but LG does not have adominant strategy.E. Panasonic has a dominant strategy, which is to enter, but LG does not have a dominantstrategy.CEnterLGDo Not EnterEnter- 1500Panasonic- 1501500Do Not Enter1,5000

A strategy that gives the highest payoff among all strategies irrespective of the action of another…

Suppose that Panasonic and LG are the only two firms that can produce a new type of holographic TV. The payoffs (in millions of dollars) from entering this product market are shown in payoff matrix to the right. the If both firms move simultaneously, does either firm have a dominant strategy? OA. Both firms have a dominant strategy, which is to enter. OB. Neither firm has a dominant strategy. O C. Both firms have a dominant strategy, which is not to enter. O D. Panasonic has a dominant strategy, which is not to enter, but LG does not have a dominant strategy. O E. Panasonic has a dominant strategy, which is to enter, but LG does not have a dominant strategy. Enter LG Do Not Enter Enter - 150 0 Panasonic - 150 1500 Do Not Enter 1,500 0 0

Suppose that Panasonic and LG are the only two firms that can produce a new type of holographic TV. The payoffs (in millions of dollars) from entering this product market are shown in payoff matrix to the right. the If both firms move simultaneously, does either firm have a dominant strategy? OA. Both firms have a dominant strategy, which is to enter. OB. Neither firm has a dominant strategy. O C. Both firms have a dominant strategy, which is not to enter. O D. Panasonic has a dominant strategy, which is not to enter, but LG does not have a dominant strategy. O E. Panasonic has a dominant strategy, which is to enter, but LG does not have a dominant strategy. Enter LG Do Not Enter Enter - 150 0 Panasonic - 150 1500 Do Not Enter 1,500 0 0

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 a sequential-move game in which an entrant is considering entering an industry in competition with an incumbent firm. If the entrant does not enter ("Out"), the incumbent firm earms a payoff of 10, while the entrant earns a payoff of 0. If the entrant enters ("In"), then the incumbent can either accommodate or fight. If the incumbent accommodates, both eamn a payoff of 5. If the incumbent fights, then the entrant can either leave the industry ("Withdraw") or remain in it ("Stay"). If the entrant stays, both earn a payoff of -5. If the entrant withdraws, the entrant earns a payoff of - 1, and the incumbent earms a payoff of 8. The extensive form of the game is depicted in the following figure, where the payoffs are of the form (Entrant Payoff, Incumbent Payoff). Entrant In Out Incumbent Accommodate Fight O Entrant (5,5) (0,10) Stay Withdraw (-5,-5) (-1,8)
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Pictech Pricing High Low High 8, 8 4, 13 Flashfone Pricing Low 13, 4 7,7 For example, the lower-left cell shows that if Flashfone prices low and Pictech prices high, Flashfone will earn a profit of $13 million, and Pictech will earn a profit of $4 million. Assume this is a simultaneous game and that Flashfone and Pictech are both profit-maximizing firms. If Flashfone prices high, Pictech will make more profit if it chooses a v price, and if Flashfone prices low, Pictech will make more profit if it chooses price. price, and if Pictech prices low, Flashfone will make more profit if it chooses If Pictech prices high, Flashfone will make more profit if it chooses a price. a dominant strategy for both Flashfone and Pictech. Considering all of the information given, pricing low If the firms do not collude, what strategies will they end up choosing? O Flashfone will choose a high price, and Pictech will choose a low price. O Both Flashfone and Pictech will choose a high price. O Both…
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12. An important characteristic of a dominant strategy is that: Select one: a. it is the best strategy to dominate your opponents b. it always leads to a Nash equilibrium where all players equally well off c. it can prevent the game reaching a Nash equilibrium d. it is the best strategy for a player, regardless of whatever strategy the opponent chooses
◄ Search 12:47 PM Sun Nov 12 ← Note Nov 12, 2023 Uptown's price strategy The Nash equilibrium occurs when High Low LED RareAir's price strategy High $12 $15 The more favorable outcome would be for $12 Tt ✪ $6 B Low $6 D $8. $15 $8 S O both firms have an incentive to deviate from this strategy given the strategy of the competing firm. It is shown by the dominant strategy of cell A. 92% neither firm has an incentive to deviate from this strategy given the strategy of the competing firm. It is shown by the dominant strategy of cell D. O one firm consistently has an incentive to deviate from this strategy given the strategy of the competing firm. It is shown by the high-price strategy of cell B. O one firm consistently has an incentive to deviate from this strategy given the strategy of the competing firm. It is shown by the high-price strategy of cell C. O the firms to collude and use the high-price strategy but this strategy requires cooperation. O one firm to take the lead and let the…