Coles and Woolworths simultaneously must choose whether to enter market A, or to enter market B. The payoffs are (4, 1) to Coles and Woolworths, respectively, if both firms opt the same markets. If Coles opts for market A and Woolworths B, the payoffs are (2, 3). Finally, if Coles opt for B and Woolworths A, the payoffs are (3, 2). Which statement is true? O There are two Nash equilibria in this game; this is a coordination game O There is one Nash equilibrium in this game; this is a Prisoner's Dilemma game. O If Coles opts for A. Woolworths' best response is B. O The Nash equilibrium is (A. B) for Coles and Woolworths, respectively. O None of the answers are correct

Coles and Woolworths simultaneously must choose whether to enter market A, or to enter market B. The payoffs are (4, 1) to Coles and Woolworths, respectively, if both firms opt the same markets. If Coles opts for market A and Woolworths B, the payoffs are (2, 3). Finally, if Coles opt for B and Woolworths A, the payoffs are (3, 2). Which statement is true? O There are two Nash equilibria in this game; this is a coordination game O There is one Nash equilibrium in this game; this is a Prisoner's Dilemma game. O If Coles opts for A. Woolworths' best response is B. O The Nash equilibrium is (A. B) for Coles and Woolworths, respectively. O None of the answers are correct

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter13: best-practice Tactics: Game Theory

Section: Chapter Questions

Problem 12E

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if Y = 4 (a) If ⟨a,d⟩ is played in the first period and ⟨b,e⟩ is played in the second period, what is the resulting (repeated game) payoff for the row player? (b) What is the highest payoff any player can receive in any subgame perfect Nash equilibrium of the repeated game?
Suppose that there are only two firms in a market in which demand is given by p = 64 - Q, where Q is the total production of the two firms. Each firm can choose either a low level of output, qL = 15, or a high level of output, qH = 20. The unit cost of production for both firms is $4. Write down the normal-form representation of the game in which the strategic variable for each firm is the quantity of output and the firms make their choices simultaneously. Find the pure strategy Nash equilibrium of this game (quantities produced and market price).
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Consider the game shown below. In this game, players 1 and 2 must move at the same time without knowledge of the other player’s move. Player 1’s choices are shown in the row headings (A, B, C, D), Player 2’s choices are shown in the column headings (E, F, G). The first payoff is for the row player (Player 1) and the second payoff is for the column player (Player 2). Player 2 Player 1 E F G A 2, 4 7, 7 2, 6 B 10, 6 1, 7 12, 4 C 4, 6 8, 8 7, 7 D 1, 6 3, 9 6, 7
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Suppose two players play a two-period repeated game, where the stage game is the normal-form game shown below. Is there a subgame perfect Nash equilibrium in which the players select (A, X) in the first period? If so, fully describe such equilibrium. If not, explain why not. Player 1 has choice A, B; Player 2 has choice X, Y, Z. Payoff: (A,X)-(5,7), (A,Y)-(2,4), (A,Z)-(3,8), (B,X)-(1,4), (B,Y)-(3,5), (B,Z)-(1,4)
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