Indicate for each sentence whether it is true or false. Mark true with a T and false with a F. For each sentence, write a few words of justification. Suppose that firms A, B, and C have the option to coalize with one of the other firms to exclude the third from the market. That is, the three possible coalitions that can be formed are {A, B}, {A, C}, and {B, C}. Each possible coalition creates a market value that can be shared (although not equally) between the two firms involved. Thus, coalition {A, B} has value 40, {A, C} has value 90, and {B, C} has value 120. a. In the bargaining set, the payoff for A is 20. b. The bargaining set is empty. c. The allocation (15 to A, 25 to B) following coalition {A, B} is blocked by coalition {B, C} with allocation (30 to B, 80 to C). d. It is possible to find a Pareto-efficient allocation.e. If B claims 35 in a coalition with A, then A cannot object that it will be able to claim for a larger value in a coalition with C
Indicate for each sentence whether it is true or false. Mark true with a T and false with a F. For each sentence, write a few words of justification. Suppose that firms A, B, and C have the option to coalize with one of the other firms to exclude the third from the market. That is, the three possible coalitions that can be formed are {A, B}, {A, C}, and {B, C}. Each possible coalition creates a market value that can be shared (although not equally) between the two firms involved. Thus, coalition {A, B} has value 40, {A, C} has value 90, and {B, C} has value 120. a. In the bargaining set, the payoff for A is 20. b. The bargaining set is empty. c. The allocation (15 to A, 25 to B) following coalition {A, B} is blocked by coalition {B, C} with allocation (30 to B, 80 to C). d. It is possible to find a Pareto-efficient allocation.e. If B claims 35 in a coalition with A, then A cannot object that it will be able to claim for a larger value in a coalition with C
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter13: best-practice Tactics: Game Theory
Section: Chapter Questions
Problem 1E
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Indicate for each sentence whether it is true or false. Mark true with a T and false with a F.
For each sentence, write a few words of justification.
Suppose that firms A, B, and C have the option to coalize with one of the other firms to exclude the third from the market. That is, the three possible coalitions that can be formed are {A, B}, {A, C}, and {B, C}. Each possible coalition creates a market value that can be shared (although not equally) between the two firms involved. Thus, coalition {A, B} has value 40, {A, C} has value 90, and {B, C} has value 120.
a. In the bargaining set, the payoff for A is 20.
b. The bargaining set is empty.
c. The allocation (15 to A, 25 to B) following coalition {A, B} is blocked by coalition {B, C} with allocation (30 to B, 80 to C).
d. It is possible to find a Pareto-efficient allocation.
e. If B claims 35 in a coalition with A, then A cannot object that it will be able to claim for a larger value in a coalition with C
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