Microeconomics (9th Edition) (Pearson Series in Economics)
9th Edition
ISBN: 9780134184241
Author: Robert Pindyck, Daniel Rubinfeld
Publisher: PEARSON
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Question
Chapter 13, Problem 1RQ
To determine
The difference between the cooperative game and non-cooperative game.
Expert Solution & Answer
Explanation of Solution
In a cooperative game, players communicate and arrange binding contracts where both parties must adhere with the agreement must adhere. If there is no formal communication in coordinating each other’s actions, it is a non-cooperative game. In a non-cooperative game, even though the players act independently, they are aware of other’s existence and know the payoffs of each other. A joint venture or a formal cartel agreement such as OPEC is an example of a cooperative game. Non cooperative game typically happens in the R&D (Research and Development) where the companies contest to obtain a patent.
Economics Concept Introduction
Cooperative game: Cooperative game is the game which the players formally communicate and arrange the binding contracts.
Non-cooperative game: Non-cooperative game is the game which the players does not communicate or arrange the binding contracts but is well aware of the existence and payoffs each other.
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Consider the table below, which has data on insurance status and medical expenditures for different types of professors at Hypothetical University (HU), economics &
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_
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000000
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Consider the table below, which has data on insurance status and medical expenditures for different types of professors at Hypothetical University (HU), economics &
criminology professors. Assume that there are an equal number of economics and criminology professors. Assume further that econ professors all have the same level of health
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2021
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0000
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???
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$10,000
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Chapter 13 Solutions
Microeconomics (9th Edition) (Pearson Series in Economics)
Knowledge Booster
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