Find an equilibrium in the following game, with Nature moving first, with fixed probabilities as shown (2,2) (0,2). F 2 Q (4,0)N N (6,0) .1 (0,0) (2,0) F .9 B Q (6,2)N 2 1 N(4,2) B.
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- Brown’s TV Production is considering producing a pilot for a comedy series for a major network. While the network may reject the pilot and series, it may also purchase the program for 1 or 2 years. Brown may produce the pilot or transfer the rights for the series to a competitor for $100,000. Brown’s profits are summarized in the following payoff table (profits in thousands). sate of nature reject 1 year 2 years produce pilot -100 50 150 sell to competitor 100 100 100 If the probability estimates for the states of nature are, P(reject)=0.20, P(1 year)=0.30, and P(2 years)=0.5, what is the maximum Brown should be willing to pay for inside information on what the network will do?The Gorman Manufacturing Company must decide whether to manufacture a component part at its Milan, Michigan, plant or purchase the component part from a supplier. The resulting profit is dependent upon the demand for the product. The following payoff table shows the projected profit (in thousands of dollars): state of nature low demand medium demnad high demand Decision alternative s1 s2 s3 manufacture d1 -20 40 100 purchase d2 10 45 70 The state-of-nature probabilities are P(s1) = 0.35, P(s2) = 0.35, and P(s3) = 0.30. a. Use expected value to recommend a decision. b. Use EVPI to determine whether Gorman should attempt to obtain a better estimate of demand.The Gorman Manufacturing Company must decide whether to manufacture a component part at its Milan, Michigan, plant or purchase the component part from a supplier. The resulting profit is dependent upon the demand for the product. The following payoff table shows the projected profit (in thousands of dollars): state of nature low demand medium demnad high demand Decision alternative s1 s2 s3 manufacture d1 -20 40 100 purchase d2 10 45 70 The state-of-nature probabilities are P(s1) = 0.35, P(s2) = 0.35, and P(s3) = 0.30. a. A test market study of the potential demand for the product is expected to report either a favourable (F) or unfavourable (U) condition. The relevant conditional probabilities are as follows: P(F|S1)=0.10 P (U|S1)=0.90 P(F|S2)=0.40 P (U|S2)=0.60 P(F|S3)=0.60 P (U|S3)=0.40 A.Compute the probabilities by completing the table Sate of…
- The Gorman Manufacturing Company must decide whether to manufacture a component part at its Milan, Michigan, plant or purchase the component part from a supplier. The resulting profit is dependent upon the demand for the product. The following payoff table shows the projected profit (in thousands of dollars): state of nature low demand medium demnad high demand Decision alternative s1 s2 s3 manufacture d1 -20 40 100 purchase d2 10 45 70 The state-of-nature probabilities are P(s1) = 0.35, P(s2) = 0.35, and P(s3) = 0.30. a. A test market study of the potential demand for the product is expected to report either a favourable (F) or unfavourable (U) condition. The relevant conditional probabilities are as follows: P(F|S1)=0.10 P (U|S1)=0.90 P(F|S2)=0.40 P (U|S2)=0.60 P(F|S3)=0.60 P (U|S3)=0.40 What is the expected value of the market research information?…The Gorman Manufacturing Company must decide whether to manufacture a component part at its Milan, Michigan, plant or purchase the component part from a supplier. The resulting profit is dependent upon the demand for the product. The following payoff table shows the projected profit (in thousands of dollars): state of nature low demand medium demnad high demand Decision alternative s1 s2 s3 manufacture d1 -20 40 100 purchase d2 10 45 70 The state-of-nature probabilities are P(s1) = 0.35, P(s2) = 0.35, and P(s3) = 0.30. a. A test market study of the potential demand for the product is expected to report either a favourable (F) or unfavourable (U) condition. The relevant conditional probabilities are as follows: P(F|S1)=0.10 P (U|S1)=0.90 P(F|S2)=0.40 P (U|S2)=0.60 P(F|S3)=0.60 P (U|S3)=0.40 A.Compute the probabilities by completing the table Sate of…You hold an oral, or English, auction among three bidders. You estimate that each bidder has a value of either $100 or $125 for the item, and you attach probabilities to each value of 50%. The winning bidder must pay a price equal to the second highest bid. The following table lists the eight possible combinations for bidder values. Each combination is equally likely to occur. On the following table, indicate the price paid by the winning bidder. Bidder 1 Value Bidder 2 Value Bidder 3 Value Probability Price ($) ($) ($) $100 $100 $100 0.125 $100$100$1250.125 $100$125$1000.125 $100$125$1250.125 $125$100$1000.125 $125$100$1250.125 $125$125$1000.125 $125$125$1250.125 The expected price paid is . Suppose that bidders 1 and 2 collude and would be willing to bid up to a maximum of their values, but the two bidders would not be willing to bid against each other. The probabilities of the combinations of bidders are still…
- You hold an oral, or English, auction among three bidders. You estimate that each bidder has a value of either $40 or $50 for the item, and you attach probabilities to each value of 50%. The winning bidder must pay a price equal to the second highest bid. The following table lists the eight possible combinations for bidder values. Each combination is equally likely to occur. On the following table, indicate the price paid by the winning bidder. Combination Number Bidder 1 Value Bidder 2 Value Bidder 3 Value Probability Price ($) ($) ($) 1 $40 $40 $40 0.125 2 $40 $40 $50 0.125 3 $40 $50 $40 0.125 4 $40 $50 $50 0.125 5 $50 $40 $40 0.125 6 $50 $40 $50 0.125 7 $50 $50 $40 0.125 8 $50 $50 $50 0.125 The expected price paid is . Suppose that bidders 1 and 2 collude and would be willing to bid up to a maximum of their values, but the two bidders would not be willing to bid against each…The current average diesel price is about 145 pence per litre. Your friend firmly believes that the average diesel price will shoot over 160 pence per litre for the Christmas period due to supply and logistics problems while you think, with the mitigation policies from the government, that there is a 60% probability that it will remain below 160 pence per litre. The two of you decide to bet on the outcome with x pounds: if you win, your friend pays you x pounds and vice versa. Your current wealth is 5,000 pounds which is also the maximum amount you can bet. As an expected utility maximiser, should you bet, and why or why not? If you do bet, what is the optimal amount that you should bet to maximise your expected utility?True/False a. Consider a strategic game, in which player i has two actions, a and b. Let s−i be some strategy profile of her opponents. If a IS a best response to s−i, then b is NOT a best response to s−i. b. Consider the same game in (a). If a IS NOT a best response to s−i, then a does NOT weakly dominates b. c. Consider the same game in (a). If a mixed strategy of i that assigns probabilities 13 and 23 to a and b, respectively, IS a best response to s−i, SO IS a mixed strategy that assigns probabilities 32 and 13 to a and b, respectively. d. Consider the same game in (a). If a mixed strategy of i that assigns probabilities 13 and 23 to a and b, respectively, is NOT a best response to some strategy profile of her opponents, s−i, NEITHER is a mixed strategy that assigns probabilities 32 and 13 to a and b, respectively. e. Consider the same game in (a). If a IS a best response to s−i, SO IS any mixed strategy that assigns positive probability to a. f. Consider the same game in (a). If a…
- 1. Individual Problems 18-1 You hold an oral, or English, auction among three bidders. You estimate that each bidder has a value of either $88 or $110 for the item, and you attach probabilities to each value of 50%. The winning bidder must pay a price equal to the second highest bid. The following table lists the eight possible combinations for bidder values. Each combination is equally likely to occur. On the following table, indicate the price paid by the winning bidder. Combination Number Bidder 1 Value Bidder 2 Value Bidder 3 Value Probability Price ($) ($) ($) 1 $88 $88 $88 0.125 2 $88 $88 $110 0.125 3 $88 $110 $88 0.125 4 $88 $110 $110 0.125 5 $110 $88 $88 0.125 6 $110 $88 $110 0.125 7 $110 $110 $88 0.125 8 $110 $110 $110 0.125 The expected price paid is . Suppose that bidders 1 and 2 collude and would be willing to bid up to a maximum of their values, but the two bidders…You are taking a multiple-choice test that awards you one point for a correct answer and penalizes you 0.25 points for an incorrect answer. If you have to make a random guess and there are five possible answers, what is the expected value of guessing? Group of answer choices -0.25. 0.25. 0.5. 1. 0.A software developer makes 175 phone calls to its current customers. There is an 8 percent chance of reaching a given customer (instead of a busy signal, no answer, or answering machine). The normal approximation of the probability of reaching at least 20 customers is Multiple Choice .022 .007 .063 .937