MICROECONOMICS
MICROECONOMICS
11th Edition
ISBN: 9781266686764
Author: Colander
Publisher: MCG
Question
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Chapter 20, Problem 5QE

(a)

To determine

Explain the dominant strategy of each firm.

(b)

To determine

Find the Nash equilibrium.

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Fill in the chart attached and answer the following questions:  a) Bert's dominant strategy is to: (pick the correct answer below ) - no dominant strategy - fish for 20 hours per week -fish for 40 hours per week.    b) Ernie's dominant strategy is to: ( pick the correct answer below)  - no dominant strategy - fish for 20 hours per week -fish for 40 hours per week.  c) Is there a Nash Equilibrium? ( pick the correct answer below)  - No - Yes, both fish for 20 hours per week - Yes, one fisher for 40 and the other for 20.  - Yes both fish for 30 hours per week.    d) Is there an incentive for Bert and Ernie to collude? Why or why not?
Question is attached
What is the difference, if any, between a dominant strategy and a Nash equilibrium?  Give examples.
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