What is the payoff for each firm in this simultaneous game? a. Both firms will earn 0 b. Firm A will earn 50 and firm B will earn -10 O c. Firm A will earn -10 and firm B will earn 50 Od. Both firms will earn 25 Refer to the following normal form game of price competition for questions 85 - 88. Firm A Low Price High Price Firm B Low Price 0,0 -10, 50 High Price 50, -10 25, 25

What is the payoff for each firm in this simultaneous game? a. Both firms will earn 0 b. Firm A will earn 50 and firm B will earn -10 O c. Firm A will earn -10 and firm B will earn 50 Od. Both firms will earn 25 Refer to the following normal form game of price competition for questions 85 - 88. Firm A Low Price High Price Firm B Low Price 0,0 -10, 50 High Price 50, -10 25, 25

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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2 questions refer to the games below. (Fun fact, as an aside: the payoffs reflect the frequencies of the letter pairs formed by the names of the strategies in the English language, per 10,000 words.)
7.
1. Consider the following game matrix. Player A Answer: Top Bottom Left a, b e, f Player B Right c, d g, h (a) If top and left are strictly dominant strategies, then what do we know the relationship of the parameters? (b) If (top, left) is a Nash equilibrium, then what do we know the relationship of the parameters? Answer: (c) If top and left are strictly dominant strategies, will (top, left) be a Nash equilibrium? Why? Answer: (d) If (top, left) is a Nash equilibrium, must the strategies be strictly dominant strategies? Why? Answer:
Please no written by hand and no emage
1. The table below shows a prisoner's dilemma in normal form. Players 1 and 2 each choose between D and C. D C D 2,2 1,10 10, 1 5,5 Answer the following questions. Remember to explain your reasoning. (a) If the game is played only once, what is the equilibrium in dominant strategies? (b) If the game is played three times in a row, what action does each player choose in every round? Suppose that the game is repeated indefinitely. The players do not discount the future. How- ever, the game ends with probability p € (0, 1) after each round. Assume that each player uses the following grim-trigger strategy. Each player chooses C in the first round. Each player chooses C in the current round if both players chose C in every previous round. Each player chooses D in the current round if either player chose D in some previous round. (c) If p = 1, is it optimal for each player to use the grim-trigger strategy above given that the other player uses the grim-trigger strategy above? [Hint: compare…
I have attracted a picture of my question because I don't know how to insert a table, if possible, can you please answer the question in typing because I fell hard to understand hand written works, thanks
Question 5 Consider following extensive form game Keep Prices (8,2) Advertise Lower Prices (4,6) O Advertise; Lower Prices Firm 1 O Advertise; Keep Prices Firm 2 O Not Advertise; Keep Prices Not Advertise The subgame perfect Nash-equilibrium is O Not Advertise; Lower Prices Keep Prices (6,10) O Lower Prices (3,7) 5 pts
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A 201.
3. Consider the following game: K Out 2 2 1 9 Player 1 Player 1 X In A Y Player 2 0 2 B 5 5 a) Does the game have perfect information? Why/why not? b) Circle the subgames. c) Find all backward induction solutions. d) Below are written five strategy profiles. One of them is a subgame perfect equilibrium; circle it! One of them is not a Nash equilibrium; write "X" across it! ((Out, X), A) ((Out, Y), A) ((In, Y),B) ((Out, Y), B) ((In, X),B)
12. What is the subgame-perfect outcome from a finitely repeated game? a. Iterated Elimination Outcome played in each stage b. Backwards Induction Outcome played in each stage Nash Equilibrium played in each stage d. Nash Equilibrium in stage 1 only