Consider the normal-form game bellow where x > 0. a) For what values of x do both firms have a dominant strategy? What is the Nash equilibrium (or equilibria) in these cases? b) For what values of x does only one firm have a dominant strategy? What is the Nash equilibrium (or equilibria) in these cases? c) Are there any values of x such that such neither firm has a dominant strategy? Is there a Nash equilibrium in such cases?

Consider the normal-form game bellow where x > 0. a) For what values of x do both firms have a dominant strategy? What is the Nash equilibrium (or equilibria) in these cases? b) For what values of x does only one firm have a dominant strategy? What is the Nash equilibrium (or equilibria) in these cases? c) Are there any values of x such that such neither firm has a dominant strategy? Is there a Nash equilibrium in such cases?

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter8: Game Theory

Section: Chapter Questions

Problem 8.1P

See similar textbooks

Similar questions

QUESTION 1 Stackelberg duopoly game is also known as the ________ model. If we change the Stackelberg ______ competition game to a simultaneous-move game, we get the ______ game results. leader-follower, quantity; Cournot Competitive fringe; price; backward induction leader-follower, quantity; Bertrand entry, price; Cournot QUESTION 2 Comparing Stackelberg and Cournot competition results, we can say that the _____ is better off while the ______ is worse off under Stackelberg than under Cournot results. This result show that there is _______________ advantage. entrant, incumbent, investment leader, follower, first-mover follower, leader, a size incumbent, entrant, first-mover QUESTION 3 Mark all the FALSE statements An equilibrium is a collection of strategies (and a strategy is a complete plan of action), whereas an outcome describes what will happen only in the contingencies that are expected to arise, not in every contingency that might arise. In games of complete but imperfect…
Explain all will rate what is always true for a pure nash equilibrium of a two-person non zero-sum game A.No player can improve his payoff with a unilateral change of strategy B. it is a Pareto maximum of the payoff matrix C. No player can worsen the payoff of his opponent with a unilateral change of strategy D. It gives worse payoffs to both players than any berge equilibrium
This table shows for the profits of firm a and firm b. Answer both parts a and b please Part a) Is firm 1 using a dominant strategy? What about for Firm b? Explain why or why not for each. Part b) Does this game have a Nash equilibrium? Explain why or why not.
Consider this market that is dominated by two airlines, American and United. Each can choose to charge a high price (and restrict capacity) or charge a low price (and expand capacity). If one of the airlines reduces the price and the other does not, then the airline that reduced the price can capture customers from the other airline. The profits for each outcome is shown below: a. Does United have a dominant strategy? If so, what is it? Explain. b. What is the Nash equilibrium in this game? Explain. c. Is this game an example of a Prisoner’s Dilemma? Explain.
Consider this market that is dominated by two airlines, American and United. Each can choose to charge a high price (and restrict capacity) or charge a low price (and expand capacity). If one of the airlines reduces the price and the other does not, then the airline that reduced the price can capture customers from the other airline. The profits for each outcome is shown below: a.Does United have a dominant strategy? If so, what is it? Explain. b. What is the Nash equilibrium in this game? Explain. c. Is this game an example of a Prisoner’s Dilemma? Explain.