H L H 12, 8 2, 3 L 3,2 4, 4 The numbers in each cell of the matrix above, (m₁, m2), represents monetary payments that two players receive based on their choices of actions {H, L}. Refer to this table for questions 1-2 below. 1. Assume that the utility of each player equals to the amount of money she gets (that is, the matrix above represent the payoffs in the game). Denote by p the probability that player 1 picks the action H (that is, p summarized Player 1's strategies given that there are only two actions). Similarly, denote by q the probability that player 2 chooses to play H. Which of the following statements is true about the mixed strategy Nash equilibrium (NE) for this game? (a) p has to be such that player 2 is indifferent between choosing H and L (b) p has to be such that player 1 is indifferent between choosing H and L (c) Player 1 can never be indifferent between playing H and L in any NE (d) The game has no mixed strategy Nash equilibrium. (e) p and q are both equal to ½ in the mixed strategy NE 2. Which of the following characterizes the Nash Equilibrium where at least one player uses a strictly mixed strategy? (a) The game has no mixed strategy Nash equilibrium. (b) p= == (c) p = 1,9= }}} (d) p= (e) p= = 1,9 = 11 3. Titanium Dioxide, the base chemical used to make white paint, is produced by two base chemical companies. These companies compete a la Cournot. The market inverse demand function is given by P(Q) = 8-Q. Assume that both firms have the total cost functions C(q) 1+2q. Let the star superscript* denote equilibrium quantities/prices/profits. Which of the following statements is true? (a) q* = q = 4 (b) π₁ =π=3 (c) p* = 6 (d) л<л½ (e) π₁ = π₁₂ = 4
H L H 12, 8 2, 3 L 3,2 4, 4 The numbers in each cell of the matrix above, (m₁, m2), represents monetary payments that two players receive based on their choices of actions {H, L}. Refer to this table for questions 1-2 below. 1. Assume that the utility of each player equals to the amount of money she gets (that is, the matrix above represent the payoffs in the game). Denote by p the probability that player 1 picks the action H (that is, p summarized Player 1's strategies given that there are only two actions). Similarly, denote by q the probability that player 2 chooses to play H. Which of the following statements is true about the mixed strategy Nash equilibrium (NE) for this game? (a) p has to be such that player 2 is indifferent between choosing H and L (b) p has to be such that player 1 is indifferent between choosing H and L (c) Player 1 can never be indifferent between playing H and L in any NE (d) The game has no mixed strategy Nash equilibrium. (e) p and q are both equal to ½ in the mixed strategy NE 2. Which of the following characterizes the Nash Equilibrium where at least one player uses a strictly mixed strategy? (a) The game has no mixed strategy Nash equilibrium. (b) p= == (c) p = 1,9= }}} (d) p= (e) p= = 1,9 = 11 3. Titanium Dioxide, the base chemical used to make white paint, is produced by two base chemical companies. These companies compete a la Cournot. The market inverse demand function is given by P(Q) = 8-Q. Assume that both firms have the total cost functions C(q) 1+2q. Let the star superscript* denote equilibrium quantities/prices/profits. Which of the following statements is true? (a) q* = q = 4 (b) π₁ =π=3 (c) p* = 6 (d) л<л½ (e) π₁ = π₁₂ = 4
Chapter7: Uncertainty
Section: Chapter Questions
Problem 7.11P
Related questions
Question
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 5 steps with 2 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning