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There are two pubs: Pub A and Pub B. Each can charge its own price for beer, either $2, $4, or $5. The payoff table below shows the profit earned by each Pub for the different beer price combinations that each charge. There are nine different scenarios. Pub B P = $2 P= $4 P = $5 P= $2 P = $4 P = $5 10, 10 12, 14 15, 14 14, 15 28, 15 25, 25 14, 12 Pub A 20, 20 15, 28 Does each pub have a dominant strategy and if so what is it? What is the Nash equilibrium or equilibria (multiple equilibrium)? Show your logic, briefly. а. b.

There are two pubs: Pub A and Pub B. Each can charge its own price for beer, either $2, $4, or $5. The payoff table below shows the profit earned by each Pub for the different beer price combinations that each charge. There are nine different scenarios. Pub B P = $2 P= $4 P = $5 P= $2 P = $4 P = $5 10, 10 12, 14 15, 14 14, 15 28, 15 25, 25 14, 12 Pub A 20, 20 15, 28 Does each pub have a dominant strategy and if so what is it? What is the Nash equilibrium or equilibria (multiple equilibrium)? Show your logic, briefly. а. b.

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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There are two pubs: Pub A and Pub B. Each can charge its own price for beer, either $2, $4, or $5. The payoff table below shows the profit earned by each Pub for the different beer price combinations that each charge. There are nine different scenarios. Pub B P = $2 P= $4 P = $5 P= $2 P = $4 P = $5 10, 10 12, 14 15, 14 14, 15 28, 15 25, 25 14, 12 Pub A 20, 20 15, 28 Does each pub have a dominant strategy and if so what is it? What is the Nash equilibrium or equilibria (multiple equilibrium)? Show your logic, briefly. а. b.
Transcribed Image Text:There are two pubs: Pub A and Pub B. Each can charge its own price for beer, either $2, $4, or $5. The payoff table below shows the profit earned by each Pub for the different beer price combinations that each charge. There are nine different scenarios. Pub B P = $2 P= $4 P = $5 P= $2 P = $4 P = $5 10, 10 12, 14 15, 14 14, 15 28, 15 25, 25 14, 12 Pub A 20, 20 15, 28 Does each pub have a dominant strategy and if so what is it? What is the Nash equilibrium or equilibria (multiple equilibrium)? Show your logic, briefly. а. b.
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