3) Suppose the profits for two firms is given below in the payoff matrix based on whether they offer their product at a low price, a medium price, or a high price. Kringle's Krunchees (2nd #) Med Low High Nick's Noshes (1st #) Low 100,150 120, 100 140, 80 Med 80, 200 140, 180 200, 160 High 50, 220 70, 200 160, 240 a) Does either firm have a dominant strategy? If so, what is it? b) What is the simultaneous game Nash Equilibrium? c) What would be the payout for Nick if he were to move first?

3) Suppose the profits for two firms is given below in the payoff matrix based on whether they offer their product at a low price, a medium price, or a high price. Kringle's Krunchees (2nd #) Med Low High Nick's Noshes (1st #) Low 100,150 120, 100 140, 80 Med 80, 200 140, 180 200, 160 High 50, 220 70, 200 160, 240 a) Does either firm have a dominant strategy? If so, what is it? b) What is the simultaneous game Nash Equilibrium? c) What would be the payout for Nick if he were to move first?

Principles of Microeconomics (MindTap Course List)

8th Edition

ISBN:9781305971493

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter17: Oligopoly

Section: Chapter Questions

Problem 9PA

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What is the payoff for both players in the SPNE of this game?-(2,5)-(3,4)- (2,2)- (5,1)- (1,7)