Assume that the two universities in USA (UA and UAA) are competing with one another to attract top students to join their PhD programs. To attract the best students, university management offers scholarships so that students will choose to further their studies at their universities. Assuming that there are two types of scholarship packages offered: Premier Scholarships (which is more attractive but costs more to the university) and Basic Scholarships. If both universities offers the same scholarship package, they will divide the number of students in a 50%-50% ratio. If one of the university offers the Premier Scholarship and the other university offers the Basic Scholarship, the university that offers the Premier Scholarship will attract 80% of the top students. [Note: Assume that the payoff to the university is in the form: (% of top students to UA; % top students to UAAJ. (a) From the above information, develop a payoff matrix for this game in the table below. Please make sure you label all empty boxes completely.
Q: Every year, management and labor renegotiate a new employment contract by sending their proposals to…
A: Value of the win = $1,000,000 Cost of hiring a lawyer = $200,000 Probability if win if both sides…
Q: Every year, management and labor renegotiate a new employment contract by sending their proposals to…
A: We are going to use Nash equilibrium theory to answer this question
Q: The Alpha and Beta companies are the only producers of digital cameras. They must both decide…
A: (a). Simultaneous games are the one where the move of two players (the strategy decided by two…
Q: Every year, management and labor renegotiate a new employment contract by sending their proposals to…
A: Nash equilibrium:The Nash equilibrium indicates that every person involved in the game makes the…
Q: two players, a and b are playing an asymmetrical game. there are n points on the game board. each…
A: A theoretical framework for imagining social scenarios involving rival participants is game theory.…
Q: The following table contains the possible actions and payoffs of players 1 and 2. Player 2…
A: It is called the game hypothesis since the hypothesis attempts to grasp the essential activities of…
Q: Suppose the first bill is passed, raising the probability of catching any given terrorist from 10%…
A: Opportunity cost is the forgone benefit that would have been gotten from a choice not picked. To…
Q: The prisoners' dilemma is a game in which the players fail to reach the best possible outcome when…
A: Prisoners' dilemma is an example of a game theory in which players are better off if they cooperate…
Q: You and a classmate are assigned a project on which you will receive one combined grade. (You each…
A: (a) Payoff matrix: The payoff matrix refers to a decision analysis tool. It shows the Payoff (say…
Q: Solve the following games (a,b, and c) by using backward induction. Which one of the following…
A: Backward induction - It is the process of reasoning back in time starting from the end of the game…
Q: Mr. Ward and Mrs. Ward typically vote oppositely in elections, so their votes “cancel each other…
A: Given:- Mr ward and Mrs ward gain=10 units of utility [Vote for their position] Mr ward and Mrs ward…
Q: Three players (Allen, Mark, Alice) must divide a cake among them. The cake is divided into three…
A: According to game theory, it is the science of strategy that falls under probability distribution.…
Q: Assume that the two universities in USA (UA and UAA) are competing with one another to attract top…
A: A payoff matrix represents the startegic decision of players which shows their payoff in the case of…
Q: Every year, management and labor renegotiate a new employment contract by sending their proposals to…
A: Nash equilibrium is a concept within game theory where the best outcome is in a game where there is…
Q: Mr. and Mrs. Ward typically vote oppositely in elections and so their votes "cancel each other out."…
A: We have 2 players, with two options vote and not vote. Dominant strategy is the strategy that gives…
Q: Suppose Justine and Sarah are playing the dictator game. Justine is the dictator and has $150 to…
A: The Dictator Game is an economic game that is intended to scrutinize the standard economic…
Q: What is the Maxi-Min strategy for player 1 and for player 2? Explain why. What are the Nash…
A: Nash equilibrium is an equilibrium outcome of players in the game where the decisions of other…
Q: Microsoft and a smaller rival often have to select from one of two competing technologies, A and B.…
A: Nash equilibrium is the optimal decision taken by both players considering the decision of other…
Q: Consider the following Cournot model. • The inverse demand function is given by p = 30 –Q, where Q =…
A: In the Cournot model, businesses compete on the amount of output they will generate, which they…
Q: Consider the following perfect information sequential move game between Player 1 and Player 2, where…
A: Given information 2 players player 1 and player 2 Given game is sequential game with perfect…
Q: ed a series of episodes involving country risk. Shell’s operations are centred in Nigeria’s Ogoni…
A: Shell is facing a problem from local land owner because as per them shell in turn makes more from…
Q: The accompanying payoff matrix shows the payoffs (in millions of dollars) for two firms, A and B,…
A: A dominant strategy in game theory is a strategy that a player will choose regardless of what the…
Q: Consider the oil production of OPEC. We simplify the situation to only two countries' case. Each…
A: Game theory provides a mathematical method to determine the equilibrium strategy when two or more…
Q: Every year, management and labor renegotiate a new employment contract by sending their proposals to…
A: Value of the win = $2,000,000 Cost of hiring a lawyer = $200,000 Probability if win if both sides…
Q: What does the folk theorem say about equilibria in repeated games? How would we resolve this issue?
A: In Game Theory, Folk Theorems are defined as a set of theorems which describe the abundance of Nash…
Q: Assume two countries (US and Germany) are facing the decision of whether to participate in the Paris…
A: Germany US Join Not Join Join A: (500, 360) B: (100, 200) Not Join C:…
Q: True or False? Explain in 2-3 sentences. If both players use grim trigger strategies, they could…
A: If both players use grim trigger strategies, they could (depending on the value of 5) sustain…
Q: If there are a known finite number of repeated games to be played, the two players will cooperate…
A: A repeating game is an elaborate form game in game theory that is made up of numerous iterations of…
Q: Which of the following is FALSE for the grim trigger strategy and the infinite horizon repeated…
A: We have 2×2 game, where both player has to choose between C and D.
Q: We will loosely model the petrol crisis the UK has recently experienced as a game. Start with a…
A: There are two players : Player 1 & 2 Strategy Set of player1 = Strategy Set of player 2 = {…
Q: Two firms are competing to establish one of two new wireless communication standards, A or B. A…
A: * SOLUTION :-
Q: Consider the following game 1\2 Y Z A 10,3 3,9 B 8,5 6,1 Suppose Player 2 holds the…
A:
Q: Every year, management and labor renegotiate a new employment contract by sending their proposals to…
A: The Nash equilibrium a dynamic hypothesis inside game hypothesis that expresses a player can…
Q: Two athletes of equal ability are competing for a prize of $10,000. Each is deciding whether to take…
A: A Nash equilibrium illustrates a solution for a non-cooperative game involving two or more players…
Q: Two street racers are playing a simultaneous game of chicken. They have to race towards each other…
A: Game theory provides a mathematical method to find the optimal solution between the two or more…
Q: Two coins are tossed : (a) if A, is the event that the first coin is a tail and A, is the event that…
A:
Q: While grading a final exam a professor discovers that two students have virtually identical answers.…
A: Dominant strategy in a game theory is the optimal choice for a player no matter what the opponent…
Q: In a situation where you have a strong neighbor, as a country, do conventional weapons offer an…
A: By discussing the strong neighbor and the conventional weapon, it is the weapons the offer and…
Q: Every year, management and labor renegotiate a new employment contract by sending their proposals to…
A: Value of the win = $1,000,000 Cost of hiring a lawyer = $300,000 Probability if win if both sides…
Q: Player 2 t1 t2 t3 Player 1 S1 3, 4 1, 0 5, 3 S2 0, 12 8, 12 4, 20 S3 2, 0 2, 11 1, 0 Suppose…
A: 1) In the game above, player 2 does not have a dominant strategy. Dominant strategy is the one which…
Q: Consider the following game - one card is dealt to player 1 ( the sender) from a standard deck of…
A: Since the question you have posted consists of multiple parts, we will answer the first part for…
Q: What is the SPNE of the following game, where Player 1 moves first and can play A or B, and player 2…
A: A subgame perfect equilibrium is a refinement of a Nash equilibrium that is used in dynamic /…
Q: Two firms are competing to establish one of two new wireless communication standards, A or B. A…
A: Pure Strategy Nash Equilibrium is achieved at the point where both firms choose the strategy ,…
Q: A and B are a couple and they want to go into a concert. A comes from Bonn and loves the music of…
A: Disclaimer :- as you posted multipart questions we are supposed to solve the first 3 questions only…
Q: Splitting Pizza: You and a friend are in an Italian restaurant, and the owner offers both of you a…
A: A Nash Equilibrium(NE) is the situation from which no player has any incentive to deviate. It is the…
Q: Define a new game as a modified version of the game in Problem 1, which we will call the Matching…
A: In case of Matching pennies, players only have 2 strategies - H and T. The strategy set will have…
Q: 1) Complete a game tree to represent this game. 2) Based on your solution in part (a), determine…
A: The game tree will depict the different combination of strategies and the payoff associated with…
Q: Two medical laboratories (lab 1 and lab 2) join forces to develop a new antibiotic. Each laboratory…
A: There are two Labs 1 & 2 providing for the researchers . There are two types of researchers : r1…
MICROECONOMICS
Step by step
Solved in 2 steps with 1 images
- In 1938, major powers met in Munich to discuss Germany’s demands to annex part of Czechoslovakia. Let us think of the issue as the proportion of Czechoslovak territory given to Germany. Possible outcomes can be plotted on a single dimension, where 0 implies that Germany obtains no territory and 1 implies that Germany obtains all of Czechoslovakia: Most countries at Munich (“Allies” for short) wish to give nothing to Germany: their ideal point is 0, which gives them utility of 1. Their worst possible outcome is for Germany to take all of Czechoslovakia; hence an outcome of 1 gives them utility of 0. In between these extremes, the Allies could propose a compromise, X, which gives them utility of 1 – X. The question for the Allies is whether to propose a compromise or fight a war with Germany, which they are sure will ensue if they offer nothing. If they propose a compromise and Germany accepts, they get a payoff of 1 – X. If they fight, they win with probability p and lose with…In 1938, major powers met in Munich to discuss Germany’s demands to annex part of Czechoslovakia. Let us think of the issue as the proportion of Czechoslovak territory given to Germany. Possible outcomes can be plotted on a single dimension, where 0 implies that Germany obtains no territory and 1 implies that Germany obtains all of Czechoslovakia Most countries at Munich (“Allies” for short) wish to give nothing to Germany: their ideal point is 0, which gives them utility of 1. Their worst possible outcome is for Germany to take all of Czechoslovakia; hence an outcome of 1 gives them utility of 0. In between these extremes, the Allies could propose a compromise, X, which gives them utility of 1 – X. The question for the Allies is whether to propose a compromise or fight a war with Germany, which they are sure will ensue if they offer nothing. If they propose a compromise and Germany accepts, they get a payoff of 1 – X. If they fight, they win with probability p and lose with…In 1938, major powers met in Munich to discuss Germany’s demands to annex part of Czechoslovakia. Let us think of the issue as the proportion of Czechoslovak territory given to Germany. Possible outcomes can be plotted on a single dimension, where 0 implies that Germany obtains no territory and 1 implies that Germany obtains all of Czechoslovakia: Most countries at Munich (“Allies” for short) wish to give nothing to Germany: their ideal point is 0, which gives them utility of 1. Their worst possible outcome is for Germany to take all of Czechoslovakia; hence an outcome of 1 gives them utility of 0. In between these extremes, the Allies could propose a compromise, X, which gives them utility of 1 – X. The question for the Allies is whether to propose a compromise or fight a war with Germany, which they are sure will ensue if they offer nothing. If they propose a compromise and Germany accepts, they get a payoff of 1 – X. If they fight, they win with probability p and lose with…
- Suppose there are two countries that are identical in their factor endowments. Both would like to consume both passenger cars and commercial vehicles, industries in which there are economies of scale. In the absence of trade, each country would have both industries. If they could trade, both could benefit by specializing and taking advantage of economies of scale to lower their costs of production. Assume that once trade becomes possible, country A specializes in producing passenger cars and country B specializes in producing commercial vehicles. Because of economies of scale, the cost of passenger cars relative to commercial vehicles is lower in country A than in country B. Explain why we would expect to observe trade in similar products, known as intra- industry trade, when production technology is characterized by economies of scales? Who are the winners and losers in this example? How does your result compare with that of the winners and losers in the CORE textbook example of the…Two oil companies are deciding how much oil to extract from their properties, which lie above the same underground reservoir. The faster that oil is extracted, the less total oil is extracted. Letting x denote the extraction rate for company X and y denote the extraction rate for company Y, we assume that the total amount of oil extracted is 1/(x + y) million gallons of oil. Of the total amount that is extracted, the share going to company X is x/(x + y), and the share to company Y is y/(x + y); that is, a company’s share depends on how fast it extracts compared with the other company. The price of oil is $100 per gallon. Each company chooses its extraction rate from the interval [1,10] in order to maximize the monetary value of the oil that it extracts. Find the Nash equilibrium extraction rates. (Note: You can assume that the payoff function is hill shaped.)Suppose that two corporations, Analytica and Bobmetrics, are negotiating the share of profit from a time sensitive joint project. The total profit generated by the project is £10 million. However, every day that the deal is delayed reduces the value of the total profit by £1 million. The way the negotiation is set up is the following: in the first day, Analytica’s lawyers propose a split of the profits, and Bobmetrics’ lawyers can agree, or they can discuss it some more and make their own offer on the second day. After that the two teams alternate. Analytica gets to make proposals on days 1, 3, 5, 7, and 9, while Bobmetrics makes proposals on days 2, 4, 6, 8 an 10. On day 11, the profit from the joint project becomes 0. The negotiations stop when either company accepts the proposal of the other, or on day 11. Find the subgame perfect Nash equilibria of this dynamic negotiation game. What happens when the loss of value is slower or faster? What conclusions can you draw? Briefly explain…
- The US and Russia have signed a nuclear no-proliferation agreement to limit arms race. Each country can cooperate or defect now. If both cooperate, their payoff is 1000 each but if both defect, it drops to 600. If one cooperates and the other defects, they receive X and 1000-X respectively, where X represents the payoff of a normal country and 1000-X the payoff of the world leader. The only rational solution is cooperation if X is equal to -200 200 500 700You and a classmate are assigned a project on which you will receive one combined grade. You each want to receive a good grade, but you also want to avoid hard work. In particular, here is the situation: • If both of you work hard, you both get an A, which gives each of you 40 units of happiness. • If only one of you works hard, you both get a B, which gives each of you 30 units of happiness. • If neither of you works hard, you both get a D, which gives each of you 10 units of happiness. • Working hard costs 25 units of happiness. Complete the following payoff matrix given the previous information. In each cell, your classmate's payoff is on the left and yours is on the right. Your Decision Work Shirk Classmate's Decision Work , , Shirk , , The likely outcome is that your classmate and you . If you get this classmate as your partner on a series of projects throughout the year, rather than only once, you are…You and a classmate are assigned a project on which you will receive one combined grade. (You each want to receive a good grade, but you also want to avoid hard work. In particular, here is the situation:• If both of you work hard, you both get an A, which gives each of you 40 units of happiness.• If only one of you works hard, you both get a B, which gives each of you 30 units of happiness.• If neither of you works hard, you both get a D, which gives each of you 10 units of happiness.• Working hard costs 25 units of happiness. a. Fill in the payoffs in the following decision box: REFER IMAGE b. What is the likely outcome? Explain your answer.c. If you get this classmate as your partner on a series of projects throughout the year, rather than only once, how might that change the outcome you predicted in part (b)?d. Another classmate cares more about good grades: She gets 50 units of happiness for a B and 80 units of happiness for an A. If this classmate were your partner (but your…
- You and a classmate are assigned a project on which you will receive one combined grade. (You each want to receive a good grade, but you also want to avoid hard work. In particular, here is the situation:• If both of you work hard, you both get an A, which gives each of you 40 units of happiness.• If only one of you works hard, you both get a B, which gives each of you 30 units of happiness.• If neither of you works hard, you both get a D, which gives each of you 10 units of happiness.• Working hard costs 25 units of happiness.a. Fill in the payoffs in the following decision box: b. What is the likely outcome? Explain your answer.c. If you get this classmate as your partner on a series of projects throughout the year, rather than only once, how might that change the outcome you predicted in part (b)?d. Another classmate cares more about good grades: She gets 50 units of happiness for a B and 80 units of happiness for an A. If this classmate were your partner (but your preferences…Royal Dutch Shell has been doing business in Nigeria since the 1920s, and has announced new plans to develop oil and gas projects there. However, over the years Shell has confronted a series of episodes involving country risk. Shell’s operations are centred in Nigeria’s Ogoni region, where the local citizens have protested Shell’s drilling and refining activities, which are said to spoil the natural environment and reduce the amount of available farmland. Protestors also accuse Shell of extracting wealth from the region without adequately compensating local residents. Ogonis sabotaged Shell’s operations to such an extent that the firm suspended parts of its Nigerian operations. Shell also came under pressure to divest its Nigerian operations and to pay reparations to the locals. What proactive steps can Shell take to anticipate future country risk? What should Shell do to deal more effectively with country risk?Andy, Brad, and Carly are playing a new online video game: Zombie Civil War. Each has an army of 100 zombies and must decide how to allocate them to battle each of the other two players’ armies. Three simultaneous battles are occurring: one between Andy and Brad, one between Andy and Carly, and one between Brad and Carly. Let Ab denote how many zombie soldiers Andy allocates to his battle with Brad, with the remaining 100 - Ab soldiers in Andy’s zombie army assigned to the battle with Carly. Bc denotes the number of zombie soldiers that Brad allocates to his battle with Carly, and 100 - Bc zombies go to his battle with Andy. Ca is the the number of zombie soldiers that Carly allocates to the battle with Andy, and 100 - Ca in her battle with Brad. To see how payoffs are determined, consider Andy. If Ab > 100 - Bc, so that Andy has more zombies than Brad in the Andy-Brad battle, then Andy wins the battle and receives w points where w > 2. If Ab = 100 - Bc, so that Andy and Brad…