Find any Nash equilibria in the game below.        Firm B     Co-operate Don’t co-operate Firm A Co-operate 60  60 0  80 Don’t co-operate 80  0 10  10   Answer a. There is one Nash equilibrium: both firms don't co-operate. b. There are no Nash equilibria. c. There are two Nash equilibria: one firm co-operates and the other firm doesn't co-operate. d. There are two Nash equilibria: (i) both firms co-operate and (ii) both firms don't co-operate.

Microeconomic Theory
12th Edition
ISBN:9781337517942
Author:NICHOLSON
Publisher:NICHOLSON
Chapter8: Game Theory
Section: Chapter Questions
Problem 8.1P
icon
Related questions
Question

Find any Nash equilibria in the game below. 

 

   

Firm B

   

Co-operate

Don’t co-operate

Firm A

Co-operate

60  60

0  80

Don’t co-operate

80  0

10  10


 

Answer

a.

There is one Nash equilibrium: both firms don't co-operate.

b.

There are no Nash equilibria.

c.

There are two Nash equilibria: one firm co-operates and the other firm doesn't co-operate.

d.

There are two Nash equilibria: (i) both firms co-operate and (ii) both firms don't co-operate.

Expert Solution
steps

Step by step

Solved in 1 steps

Blurred answer
Recommended textbooks for you
Microeconomic Theory
Microeconomic Theory
Economics
ISBN:
9781337517942
Author:
NICHOLSON
Publisher:
Cengage
Principles of Economics (MindTap Course List)
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Principles of Economics, 7th Edition (MindTap Cou…
Principles of Economics, 7th Edition (MindTap Cou…
Economics
ISBN:
9781285165875
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Principles of Microeconomics (MindTap Course List)
Principles of Microeconomics (MindTap Course List)
Economics
ISBN:
9781305971493
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Principles of Microeconomics
Principles of Microeconomics
Economics
ISBN:
9781305156050
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning