In a world of limited resources, should an automobile dealership be more concerned with the cleanliness of it car showroom or the cleanliness of the restrooms? (B) the dominant strategy is to clean the restroom (A) the dominant strategy is to clean the showroom neither a nor b is true both a and b
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- A game in which the players will not negotiate is a O A. zero-sum game. • B. non-cooperative game. C. cooperative game. • D. negative-sum game.A occurs if all players in a game play their best strategies given what their competitors do.Consider the case of global environmental problems that spill across international borders as a prisoner’s dilemma of the sort studied in Monopolistic Competition and Oligopoly. Say that there are two countries, A and B. Each country can choose whether to protect the environment, at a cost of 10, or not to protect it, at a cost of zero. If one country decides to protect the environment, there is a benefit of 16, but the benefit is divided equally between the two countries. If both countries decide to protect the environment, there is a benefit of 32, which is divided equally between the two countries. a. In Table, fill in the costs, benefits, and total payoffs to the countries of the following decisions. Explain why, without some international agreement, they are likely to end up with neither country acting to protect the environment.
- Two takeaway restaurants, ChipAhoy and FishDish, compete for business in a small seaside town. The manager of ChipAhoy has engaged you to advise on the pricing of its main offering, a fish & chips supper. Your intention is to analyse the situation as a twoplayer competitive game. After making background investigations, you have decided to adopt the following assumptions in your analysis. A1 The cost of the producing and serving a portion of fish & chips is the same for both restaurants: £3.50.A2 In a typical week, holidaymakers buy a total of 1500 portions of fish & chips, and local residents buy 1000 portions.A3 Local residents always choose the restaurant with the lower price. If prices are the same at the two restaurants, their custom is divided equally between the two. A4 Holidaymakers divide their custom 50:50 between the two restaurants, irrespective of the prices. Derive the Nash equilibrium/equilibria for the gameTwo friends, Khalid and Mahmood, are going to a watch a world cup football match. They play a simple game in which they hold out one or two fingers to decide who will pay for the other's ticket. Khalid wins if the fingers held out add up to an even number; Mahmood wins if the fingers held out add up to an odd number. The price of the ticket is 25 OMR. Construct a payoff matrix for the game. Is there a unique Nash equilibrium in this game? Which strategy should a player use to maximize her chances of winning the game?Consider the strategic form game shown. a. Assume that both players are rational. What happens?b. Assume that both players are rational and that each believes that theother is rational. What happens?c. Find the strategies that survive the ISDS.
- A player involved in a one-shot game will: A.) Cooperate with its rivals due to the threat of punishment B.) Follow punitive strategies C.) Take actions aimed at creating a reputation with his rivals D.) Act to maximize its immediate payoff E.) Follow a tit-for-tat strategy(a) Assuming that each fishery chooses fi ∈ (0, F), to maximize its payoff function, derive the players’ best response functions and find a Nash equilibrium. (b) Is the equilibrium you found in (a) unique or not? What are equilibrium payoffs? 4 (c) Suppose that a benevolent social planner wants maximize the utility of both fisheries. In other words, the social planner solves the following problem: max w(f1,f2) w(f1, f2) = u1(f1, f2) + u2(f1, f2) =2 ln(f1) + 2 ln(f2) + 2 ln(F − f1 − f2). Find the social planner’s solution. (d) What are the fisheries’ payoffs if the quantities of fish they catch are solutions to the social planner’s problem? What can you say about the Nash equilibrium quantities of fish being caught as compared to the social planner’s solution? (e) If fishery j decides to follow the recommendation of the social planner, how much fish will firm i catch?This is a two-player, simultaneous one-move game represented as a game table (normal form).a) What is the pure strategy Nash equilibrium outcome if there is one? b) Is this a socially optimal outcome? If not, which outcome is preferred? c) Do all three solution approaches for simultaneous games work independently (not together)? If not, which do not? d) Draw the game as a game tree (extensive form). e) Switch the payoffs in cells (A, A) and (D, D). What is the pure strategy Nash equilibrium outcome if there is one?
- Which of the following best describes a dominant strategy? Question 4Answer a. The strategy that a player chooses depends on what the other player does b. The strategy that a player chooses minimizes the other player's payoff c. The strategy that a player chooses is independent of what the other player does d. The strategy that a player chooses maximizes joint payoffs for both playersThe following payoff table depicts service competition between two hospitalsin a southeastern city. (Each payoff represents profit in millions of dollars.) Hospital B’s ServiceBasic All-Purpose SpecialityBasic 5, 7 5, 4 12, 6Hospital A’s All-Purpose 4, 5 8, 7 7, 4 ServicesSpeciality 6, 10 3, 12 3, 3a. Does either hospital have a dominant strategy (or any dominatedstrategy)? Assuming they determine their strategies independently ofone another, what are the hospitals’ respective (Nash) equilibriumstrategies? Explain briefly.b. Suppose instead that the hospitals merge and, therefore, coordinatetheir service decisions. Which actions should they take? Explain briefly.c. What general economic reasons might there be for a hospital mergerto generate an increase in total profit? Would the hospitals’ customersbe likely to benefit from the merger? Under what circumstances?Explain carefullyProvide an example of a company which operates on market as two one- sided platforms, describe sides and network effects.
