3 -1 4 -7 1 3 5 -2 -3 3 1 5 10.1.29 For each strictly determined game: a) Locate the saddle values b) Find the optimal strategies for R and C. Mark on the chart: R = O,C = D c) Find the value of the game %3|

3 -1 4 -7 1 3 5 -2 -3 3 1 5 10.1.29 For each strictly determined game: a) Locate the saddle values b) Find the optimal strategies for R and C. Mark on the chart: R = O,C = D c) Find the value of the game %3|

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter15: Oligopoly And Strategic Behavior

Section: Chapter Questions

Problem 15P

See similar textbooks

Similar questions

Economics - Game Theory & Business Strategy Inverse Market Demand for tires is P = 200 - .01Q We assume the manufacturer sets a Price, 'X', for the tires and the manufacrturer moves first, selecting 'X' before any sales decisions are made. In this variation, we assume there are 3 retail firms, each with Market Power. The firms (1,2,3) make their sales decisions (q1,q2,q3) simultaneously, taking the manufacturer's price X as given. Total market sales, Q, then equal q1 + q2 + q3. We assume the only cost for the retailers is the cost 'X' for each tire. Additionally, the manufacturer produces the tires at a Marginal Cost of $10 a tire. **** Write out the Extensive form of this game ****
Suppose that total unit sales of iPhones and Android phones depends on both Apple’s and Google’s advertising expenditures: Google Advertise Don’t Apple Advertise 100, 100 120, 60 Don’t 60, 120 80, 80 To find the firm’s profits from the sales figures, assume that the price is $30, that the marginal cost is $20, and that the fixed cost of advertising is $300. (a) Fill in the profits in the following simultaneous-move game: Google Advertise Don’t Apple Advertise ? ? Don’t ? ? (b) What is the Nash equilibrium of the game? What strategies result in thehighest industry profits? Explain in words why the firms don’t choosethose strategies?
Now answer the following questions: Perform iterative elimination of dominated strategies on the game. Draw the new table for each iteration as shown in the lecture video. Write corresponding actions at left and up of the table. Explain why are you removing each row or column. You should reach a 2*2 game. Rewrite the table separately. From the 2*2 game you get in question 1, find a mixed strategy σ1=(p,1−p) for Player 1 that will make Player 2 indifferent about two actions. Find a mixed strategy σ2=(q,1−q) for Player 2 that will make Player 1 indifferent about two actions. If the players are playing the mixed strategies σ1 and σ2, they both will indifferent about their strategies, hence the strategy profile (σ1,σ2) will be a Nash Equilibrium of this game. Find the expected utility for both Player 1 u1(σ1,σ2) and Player 2 u2(σ1,σ2) at this Nash Equilibrium.
Consider the following statements about the concept of subgame perfect Nash equilibrium (SPNE): (I) This concept only applies to finite games, not infinitely repeated games. (II) Some dynamic games might have a SPNE that is not a Nash Equilibrium. (III) The concept of SPNE rules out situations where a player would be acting against their own interest in some subgames. Group of answer choices a. Only I is correct. b. All options are incorrect. c. Only II is correct d. Only III is correct e. More than one option is correct
Which one of the following statements is incorrect? A. A finite static game with complete information may not have a pure strategy Nash equilibrium. B. For dynamic games with complete information, not all subgame perfect Nash equilibrium points can be found by backward induction. C. A finite static game with complete information cannot have an extensive form representation. D. A finite dynamic game with complete information may also have a normal form representation.
1. Consider an industry with inverse demand given by p = 8 – q, where p is the price, and q is the quantity. There is one incumbent firm and one potential entrant. In the first stage of the game, the incumbent chooses its quantity qi. In the second stage, the potential entrant observes qi and chooses its quantity Ce. The potential entrant can also decide not to enter the market. The production technology of both firms are represented by the cost function C = 2q. To enter industry implies a fixed entry cost of F. (a) Find the equilibrium of the game, assuming that the potential entrant enters the industry. What are the profits of firms? (b) Assume that entry is not blockaded. For which values of F does the incumbent firm prefer to deter entry? (c) For which values of F, entry blockaded?
This is a Microeconomics problem. Two firms A and B operating in the same market must choose between a collude price and a cheat price. Answer the following questions in order. (a) Does Firm A have a dominant strategy? Explain your answer. (b) Does Firm B have a dominant strategy? Explain your answer. (c) Is there an equilibrium solution to the above game? (d) Is this equilibrium solution to the game the most "ideal" outcome for the players? Explain clearly why or why not.
Which of the following statements about a Nash equilibrium is not correct? A. Each player plays a best response to opponents' Nash strategies. B. No player has a profitable unilateral deviation. C. For each finite noncoopertiave game there always exists a pure strategy Nash equilibrium. D. A game has at least two players. Which one of the following statements is incorrect? A. For dynamic games with complete information, not all subgame perfect Nash equilibrium points can be found by backward induction. B. A finite dynamic game with complete information may also have a normal form representation. C. A finite static game with complete information may not have a pure strategy Nash equilibrium. D. A finite static game with complete information cannot have an extensive form representation. Which one of the following statements is correct? A. A supergame cannot have any subgame perfect Nash equilibrium. B. A supergame can only have finite number of subgame perfect Nash…
10) Consider a repeated game in which the following one-shot game between two players is repeated "infinitely." Denote by "d" the discount factor. (Assume both players have the same discount factor.) Player 2 Cooperate Defect Player 1 Cooperate 5, 4 0, 5 Defect 6, 0 1, 1 The two players try to support cooperation by using "grim trigger strategy" as discussed in class. Answer YES or NO to each of the following three questions. (a) Can they support cooperation if the common discount factor, d, is equal to 0.23? (b) Can they support cooperation if the common discount factor, d, is equal to 0.4? (c) Can they support cooperation if the common discount factor, d, is equal to 0.15?
Demonstrate the nature of the chain store paradox by constructing, solving and discussing a suitable game theoretical example with at least three players
Determine the optimal strategy for the situation by representing it as a game and finding the saddle point. State your final answer in the terms of the original question.In an ongoing price war between Burger Haven (locally owned) and MacArches (a chain), both restaurant managers plan to change the price of a hamburger by 10¢. If they both raise their prices, there will be no change in their market shares, but if they both lower their prices, the chain's national advertising will ensure that MacArches gains 6% of the market. Again because of advertising, if Burger Haven lowers their price and MacArches raises their price, Burger Haven will gain only 3% of the market, but if Burger Haven raises their price and MacArches lowers their price, MacArches will gain 7% of the market. Use this information to decide what the managers should do. MacArches L R Burger Haven L R % % % % The saddle…
Consider the payoff matrix below representing two firms engaged in Bertrand Competition. Firm A is player 1 and Firm B is player 2. High price Low price High price 10, 12 -1, 13 Low price 12, 2 0, 3 What is Firm A's dominant strategy? Question 14Answer a. High price b. Low price c. Firm A does not have a dominant strategy