Two large tech firms, Dapple (D) and Googley (G), are considering a no poaching scheme. In such a scheme, firms agree not to hire (i.c., poach) employees away from cach other. Suppose cach firm has to decide to either poach (P) or not poach (NP) employees away from the other firm, with the outcomes provided in the payoff matrix below: G P NP 10, 10 0, 50 50, 0 NP 30, 30 Note: G's payoffs (in millions of dollars) are listed 1", while D's payoffs (in millions of dollars) are listed 2nd. (25] The Nash equilibrium for the one-shot game is that both D and G select P as their strategy. А. True В. False [26] Suppose the game is played three times (i.e., 3 periods), with each firmadopting a tit-for-tat strategy. Assuming G's discount factor (6) is 0.25, across the three periods what is the most likely present value of G's payoff stream? А. 90 В. 53.125 С. 39.375 D. 13.125 [27] Suppose the game is repeatedly played an infinite number of times, with each player adopting a trigger strategy. What values of the discount factor would ensure continuous cooperation among the two players? 8> 0.25 8> 0.50 8> 0.75 8 =0 А. В. С. D.

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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Use the following to answer questions (25) - (27):
Two large tech firms, Dapple (D) and Googley (G), are considering a no poaching scheme. In such
a scheme, firms agree not to hire (i.e., poach) employees away from each other. Suppose each firm has to
decide to either poach (P) or not poach (NP) employees away from the other firm, with the outcomes
provided in the payoff matrix below:
G
NP
10, 10
0, 50
D
NP
50, 0
30, 30
Note: G's payoffs (in millions of dollars) are listed 1st, while D's payoffs (in millions of dollars) are listed
2nd
[25]
The Nash equilibrium for the one-shot game is that both D and G select P as their strategy.
A.
True
В.
False
Suppose the
[26]
Assuming G's discount factor (8) is 0.25, across the three periods what is the most likely present value of
G's payoff stream?
game is played three times (i.e., 3 periods), with each firm adoptinga tit-for-tat strategy.
А.
90
В.
53.125
С.
39.375
D.
13.125
[27]
trigger strategy. What values of the discount factor would ensure continuous cooperation among the two
players?
Suppose the game is repeatedly played an infinite number of times, with each player adopting a
8 > 0.25
8 > 0.50
8 > 0.75
8 = 0
А.
В.
С.
D.
[28]
curve = -1, and marginal cost = 20. Accordingly, the degree of competition in this industry, as measured by
the conjectural variation, equals:
Currently, an industry is operating at a point where price = 20, quantity = 10, slope of the demand
A.
0.
В.
½.
С.
1.
D.
2.
Transcribed Image Text:Use the following to answer questions (25) - (27): Two large tech firms, Dapple (D) and Googley (G), are considering a no poaching scheme. In such a scheme, firms agree not to hire (i.e., poach) employees away from each other. Suppose each firm has to decide to either poach (P) or not poach (NP) employees away from the other firm, with the outcomes provided in the payoff matrix below: G NP 10, 10 0, 50 D NP 50, 0 30, 30 Note: G's payoffs (in millions of dollars) are listed 1st, while D's payoffs (in millions of dollars) are listed 2nd [25] The Nash equilibrium for the one-shot game is that both D and G select P as their strategy. A. True В. False Suppose the [26] Assuming G's discount factor (8) is 0.25, across the three periods what is the most likely present value of G's payoff stream? game is played three times (i.e., 3 periods), with each firm adoptinga tit-for-tat strategy. А. 90 В. 53.125 С. 39.375 D. 13.125 [27] trigger strategy. What values of the discount factor would ensure continuous cooperation among the two players? Suppose the game is repeatedly played an infinite number of times, with each player adopting a 8 > 0.25 8 > 0.50 8 > 0.75 8 = 0 А. В. С. D. [28] curve = -1, and marginal cost = 20. Accordingly, the degree of competition in this industry, as measured by the conjectural variation, equals: Currently, an industry is operating at a point where price = 20, quantity = 10, slope of the demand A. 0. В. ½. С. 1. D. 2.
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