### Efficient Sub-game Perfect Nash Equilibrium in the Given Game#### Game StructureThe game depicted above involves two players, Player 1 and Player 2, who choose between two options: "Up" and "Down." The decision tree branches out based on these choices.Here's a detailed breakdown of the game structure:#### Decision Points:1. **Player 1 Choices:** - **Up** - **Down** 2. **Player 2 Choices (conditional upon Player 1's choice):** - If Player 1 chooses **Up**: - Player 2 chooses **Up** - Result: Player 1 gets $45, Player 2 gets $155 - Player 2 chooses **Down** - Result: Player 1 gets $100, Player 2 gets $10 - If Player 1 chooses **Down**: - Player 2 chooses **Up** - Result: Player 1 gets $85, Player 2 gets $85 - Player 2 chooses **Down** - Result: Player 1 gets $95, Player 2 gets $95#### Payoff Outcomes:- If Player 1 -> Up, Player 2 -> Up: - **Player 1**: $45 - **Player 2**: $155- If Player 1 -> Up, Player 2 -> Down: - **Player 1**: $100 - **Player 2**: $10- If Player 1 -> Down, Player 2 -> Up: - **Player 1**: $85 - **Player 2**: $85- If Player 1 -> Down, Player 2 -> Down: - **Player 1**: $95 - **Player 2**: $95#### Efficient Sub-game Perfect Nash EquilibriumIn the given game, the question is to identify the efficient sub-game perfect Nash equilibrium. The efficient equilibrium is where both players receive optimal payoffs, considering the strategy combinations.- (up, up)- (up, down)- (down, up)- **(down, down)**#### Correct Answer:- **(down, down)**This outcome is efficient since it provides both players with equal payoffs of $95 each, which is higher than the other potential payoffs they could receive in different strategy

The Nash Equilibrium addresses an activity/action profile for all players in a game and is utilized…

Answered: Up Down Up Down Up gets P2 gets $15 P1…

Business

Economics

Up Down Up Down Up gets P2 gets $15 P1 gets $10 P2 gets $10 P1 gets $85 P2 gets $85

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

You own a company that produces helmets. You are currently selling 100 helmets per week. Your average total cost of producing these helmets is $100. Recall ATC=TC/Q. A customer comes to your store and says he needs a helmet and will pay you $95 for it. Thus you need to produce the 101st helmet if you make the sale. Your average total cost if you produce 101 helmets is $99.95. Do you sell the helmet to the customer for $95?
this table is tricky
A manufacturer can produce a gizmo at a cost of $6 apice. He sells this gizmo for $10 ,and at this price 10 gizmos are sold each day. The manufacturer figures that each $3 dollars decrease in price will sell 3 additional goods each day. Write out the Demand and Profit functions. What price xmaximizes profit?
When the price of salad was $5, a cafeteria sold 50 packets of salad dressing a day at $0.50 per packet. When they increased the price of salad by 40%, but kept the dressing at the same price, they sold 50% fewer packets of salad dressing.
New entry increases your |e| from 2 to 5. If you previously maximized profits at a price of $16, your new profit maximizing is $10 $16 $8 $6.40 **please show your math**
Quality solution for better ratings please
The owner of Tommy's Technicians has found that his shop is losing money and he is in jeopardy of going out of business. Sales have remained constant for quite some time and now he is looking at ways to cut expenses to stay in business. Which of the following expenses is his best choice to try to immediately reduce and save him meaningful dollars so he can remain in business? (Hint: First consider which ones he has ultimate control over?) Rent expense Utilities expense Payroll expense Shop insurance expense Advertising expense
The manufacturer of Brand A automobile tires claims that its tire can save 120 gallons of fuel over 54,000 miles of driving, as compared to a popular competitor (Brand B). If gasoline costs $4.00 per gallon, how much per mile driven does this tire save the customer (Brand A versus Brand B)? The savings are $ per mile. (Round to three decimal places.)
A studio manager stated that she would not turn down $2M per sequel right. If you paid $2M per sequel right, are you purchasing them for less than what they are valued?
Answer the question on the basis of the following demand and cost data for a specific firm. (1) Price $ 11.00 9.99 9.00 8.00 7.10 6.00 5.15 Demand Data (2) Price $ 10.00 8.85 8.00 7.00 6.10 5.00 4.15 (3) Quantity 6 7 8 9 10 11 12 Cost Data Output 6 7 8 9 10 11 12 Total Cost $61 62 64 67 72 79 86 If columns (1) and (3) of the demand data shown are this firm's demand schedule, economic profit will be W