Consider the game in the table below. Does Firm A have a strictly dominant strategy? Enter 111 for YES, 222 for NO and 999 for UNCERTAIN Firm A Right 9,14 7,9 Left Up Firm B 7,5 3,14 Down 222
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- Consider the game in the table below. Does Firm A have a strictly dominant strategy? Enter 111 for YES, 222 for NO and 999 for UNCERTAIN Firm A Left Right Firm B Up 7,7 10,12 Down 3,11 4,8Suppose that there are two firms in a market, firm 1 and firm 2. The marketis declining in size. The game starts in period 0, and the firms can compete in periods 0, 1,2, 3, ... (i.e., indefinitely) if they so choose. Duopoly profits in period t for firm 1 are equalto 105 −10t, and they are 10.5 −t for firm 2. Monopoly profits (those if a firm is the onlyone left in the market) are 510 −25t for firm 1 and 51 −2t for firm 2. At the start of eachperiod, each firm must decide either to “stay in” or “exit” if it is still active (they do sosimultaneously if both are still active). Once a firm exits, it is out of the market forever andearns zero in each period thereafter. Firms maximize their (undiscounted) sum of profits.What is this game’s subgame perfect Nash equilibrium?Consider a bankruptcy game with two risk neutral players where V =$800,000, C1= $300,000 and C2=$800,000 a) What is the Kalai-Smorodinsky bargaining solution?
- Consider a bankruptcy game with two risk neutral players where V =$800,000, C1= $300,000 and C2=$800,000. a) What is the Nash bargaining solution?13) Two identical firms are engaged in Cournot competition, with cost functionsTCA(QA) = 30 QA and TCB(QB) = 30 QB. The market demand is given by P = 480 –3Q.a) Plot the best response functions and report the Cournot-Nash equilibrium quantities, price and profits.b) What are the prices, quantities, and profits for the firms if they decide to collude and share profits equally?c) Show that firms have an incentive the deviate from the collusive outcome.d) Find the Stackelberg equilibrium if A leads and B follows.e) Show the equilibria in the previous parts on the inverse demand function. Calculate and identify consumersurplus and deadweight loss in each equilibrium. If you can only answer a limited amount of questions, please answer d and e :)4. Consider a bankruptcy game with two risk neutral players where V = $800,000, C1 = $300,000, and C2 = $800,000. a. What is the Nash bargaining solution? b. What is the Kalai-Smorodinsky bargaining solution?
- 1. What are the advantages and disadvantages of collusion? Define Collusion 2. In a Stackelberg game, what is the best response that follower firm 2 can make to the choice y1 already made by the leader, firm 1? Defining the game and provide an example of the best response.1 True or False : Every finite extensive - form game of imperfect information admits at least one pure - strategy Nash equilibrium . Justify if true or give a counter - example if not5 Suppose there are only two electric vehicle producers–Tesla and BMW. Using game theory in microeconomics, explain whether BMWand Tesla willdesign the same charge plug or different plug. What factors should the firms take into consideration?
- Claim: The game in the table below is a strategic situation. Enter 111 for YES, 222 for NO and 999 for UNCERTAIN Firm A Left Straight Right UP 3,10 3,4 3,11 firm b Middle 3,10 9,4 13,11 Down 2,10 2,4 2,11Paramter y = 0 What is the highest payoff any player can receive in any subgame perfect Nashequilibrium of the repeated game?Economics Consider an infinitely repeated game played between two firms with the following payoffs (firm 1 is listed first): · (250, 290) if both firms deviate · (290, 330) if both firms cooperate · (230, 370) if only firm 2 deviates · (350, 270) if only firm 1 deviates a. What probability-adjusted discount factor would ensure that Firm 1 would cooperate in a Nash equilibrium if Firm 2 applied a trigger strategy in the event that Firm 1 deviated? b. What probability-adjusted discount factor would ensure that Firm 2 would cooperate in a Nash equilibrium if Firm 1 applied a trigger strategy in the event that Firm 2 deviated?