Two firms are planning to join the shoe industry. Firm 2 knows the size of firm 1 but firm 1 has incomplete information on the size of firm 2. The payoffs associated with these 2 scenarios are given below
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Two firms are planning to join the shoe industry. Firm 2 knows the size of firm 1 but firm
1 has incomplete information on the size of firm 2. The payoffs associated with these 2
scenarios are given below
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- In the following games, all payoffs are listed with the row player's payoffs first and the column player's payoffs second. GAME 33 Player A Player B B1 10, 12 A1 A2 9,3 A3 8, 10 In Game 33 above, B2 B3 8,8 12, 10 7,6 11, 1 9,4 14, 3 B1 is a dominated strategy for Player B B2 is a dominated strategy for Player B B3 is a dominated strategy for Player B Player B has no dominated strategies.Starbucks and Krispy Kreme are trying to decide whether or not to open a shop in the new Mall of Africa. They both prefer if the other firm opens a shop because they can draw bigger crowds but neither wants to be the only American-branded coffee shop in the Mall. The payoff matrix for this dilemma is below. Krispy Kreme Open Don't Open Starbucks Open (i) (ii) 5,5 2,6 Don't open (iii) (iii) 6,2 3,3 MCQ question 4 Find the Nash Equilibrium (Starbucks, Krispy Kreme) for the payoff matrix when the game is played simultaneously. A. (5:5) only. B. (6,2) only. C. (2,6) only. D. (3,3) only E. There is no stable Nash Equilibrium. MCQ question 5 Suppose that Starbucks goes first in choosing to open or not to open. What is the outcome for this game? A. (5:5) only. B. (6,2) only. C. (2,6) only. D. (3,3) only E. There is no stable Nash Equilibrium.a. b. Each firm has four alternative strategies, and a certain profit/payoff is associated with each strategy. The numbers in the payoff matrix denote firm A's profit (in thousands of dollars). The total amount of profit that can be earned by the two firms together is $20000. (This is called a "constant sum game.") Firm B's profit is therefore $20000 minus firm A's profit. What strategies will the two firms select? Is the game strictly determined? If so, how much does each firm gain? B's strategies A's strategies ↓ Increase Advertising Decrease Price Increase Price Alter Product Increase Advertising 0 11 8 11 Decrease Price 8 10 6 2 Increase Price 7 12 15 Alter Product 4 15 3 12 Suppose now that due to a change in consumer preferences, firm A's "Increase Price" strategy pays off better than before when firm B elects to "Decrease Price," that is, the payoff rises from 6 to 14. What strategies will the two firms now select? Is the game strictly determined? If so, how much does each firm…
- Two rival companies competing in the same market need to decide their plans for future expansion of their stores. The Table below shows the possible outcomes of their mutually interdependent actions (payoffs are profits in £m) Giga Company Titanic Conglomerate No Change Refurbishment of existing stores Large Expansion No Change 30, 40 25, 35 15, 24 Refurbishment of existing stores 35, 30 28, 32 18, 33 Large Expansion 12, 22 18, 20 20, 25 The Nash equilibrium: (A) does not exist. (B) occurs when both firms choose Refurbishment of existing stores. (C) occurs when both firms choose Large Expansion. (D) occurs when both firms choose No Change.QUESTION 13 Consider a market where two firms (1 and 2) produce differentiated goods and compete in prices. The demand for firm 1 is given by D₁(P₁, P2) = 140 - 2p1 + P2 and demand for firm 2's product is D2 (P1, P2) 140 - 2p2 + P1 Both firms have a constant marginal cost of 20. What is the Nash equilibrium price of firm 1? (Only give a full number; if necessary, round to the lower integer; no dollar sign.)One game-theoretic explanation for why the United States never saw a widespread, coordinated lockdown to stop the spread of COVID-19 is that each state benefited from remaining open when its neighbors closed. Thus, the Nash equilibrium was for some states to remain open while others closed down. What kind of game best describes this situation? Anti-coordination game All of these categories could describe the situation. Repeated game Prisoners' Dilemma Coordination game
- 10:04 PM cb = Chegg Economics Vo LTE expert.chegg.com/expertqna Time remaining: 00:09:49 Consider the following payoff matrix for two oligopolists that are deciding what quantity to produce: Firm 2 High Quantity Low Quantity $70k; $70k $130k; $20k High Quantity Firm 1 $20k; $130k $100k; $100k Low Quantity In the Nash equilibrium of this game, what are the payoffs to each firm? O a. Firm 1 receives $130k and Firm 2 receives $20k. O b. Firm 1 receives $20k and Firm 2 receives $130k. O c. Firm 1 receives $100k and Firm 2 receives $100k. O d. Firm 1 receives $70k and Firm 2 receives $70k. Answer Skip 4G Exit 2 ¹20%Find the subgames, convert them into Normal-Forms, find the Subgame Perfect Nash Equilibrium step-by-step.Two firms are competing on price. If they have the same price, they share the market - otherwise the one with the lowest price captures all demand Market demand follows Q(P)=100-3P Cost is C(Q)=10Q Firms can only choose between the following prices: 9, 10, 11, 12. In the Nash equilibrium of this game, what prices are charged? Suggestion: calculate the profits they obtain for each of the price combinations, write down the game in its normal form (payoff matrix), and then use the underlining method to match best responses. 12 11 9 10
- Synergy and Dynaco are the only two firms in a specific high-tech industry. They face the following payoff matrix as they decide upon the size of their research budget: Dynaco's Decision Synergy's Decision Large Budget Large Budget $30 million, $20 million Small Budget $0, $30 million If Synergy believes Dynaco will go with a large budget, it will choose a budget. If Synergy believes Dynaco will go with a small budget, it will choose a budget. Therefore, Synergy a dominant strategy. O True Small Budget $70 million, $0 $50 million, $40 million If Dynaco believes Synergy will go with a large budget, it will choose a budget. If Dynaco believes Synergy will go with a small budget, it will choose a budget. Therefore, Dynaco a dominant strategy. O False True or False: There is a Nash equilibrium for this scenario. (Hint: Look closely at the definition of Nash equilibrium.)While game theory predicts non-cooperative behavior for a one-shot Prisoner's dilemma. By repeating the game, say 20 rounds, it becomes possible to adopt more complex strategies that allow cooperative play as a Nash Equilibrium in at least some rounds of the game. True FalseAP CollegeBoard Test Booklet Unit 4 Problem Set Include correctly labeled diagrams, if useful or required, in explaining your answers. A correctly labeled diagram must have all axes and curves clearly labeled and must show directional changes. If the question prompts you to “Calculate," you must show how you arrived at your final answer. Use the graph provided below to answer parts (a)-(e). Marginal Cost Average Total Cost Average Variable Cost 108 100 55 Demand 0 10 21 31 44 57 77 Quantity Marginal Revenue BigMed, a profit-maximizing firm, has a patent on a medical device, making it the only producer of that device. The graph above shows BigMed's demand, marginal revenue, average total cost, average variable cost, and marginal cost curves. (a) Calculate BigMed's total revenue if the firm produces the allocatively efficient quantity. Show your work. (b) Starting at a price of $100, if BigMed were to increase the price by 2%, will the quantity demanded decrease by more than 2%, by less…
