Lets again consider the same two firms from the previous question. In this game, both firms have already entered the market and now decide what price to charge. For concreteness, suppose that there are 10 million customers, each of whom will buy from one of the two firms, and that each firm decides whether to charge $20 or $30 (with costs of zero). If both firms charge the same price, they will each sell to 5 million customers, but if one charges the low price ($20) and the other charges the high price (S30), 8 million will buy from the low-price firm and 2 million will buy from the high-price firm. (a) Create a payoff matrix for this game. (b) Identify any dominant strategies for either of the two players. (C) Identify any Nash equilibrium in the game, using the best response analysis. (d) Is this a Prisoner's Dilemma situation?
Q: Suppose Edison and Hilary are playing a game in which both must simultaneously choose the action…
A:
Q: Suppose that Creamland and Dairy King are the only two firms that sell ice cream. The following…
A: Answer: (1). If Creamland decides to advertise, it will earn a profit of $10 million if Dairy King…
Q: Rose and Colin play the following dynamic game with Rose moving first. In her first move, Rose has a…
A: In the given game There are 2 players Rose and Colin Playing dynamic 3 games G1,G2 and G3 G1= G2=…
Q: Two oligopolistic aluminium manufacturers are engaged in bitter competition with one another. Both…
A: An oligopoly is type of market with a few sellers and a large number of buyers. The sellers compete…
Q: Suppose that Fizzo and Pop Hop are the only two firms that sell orange soda. The following payoff…
A: In Nash equilibrium, the best response to a strategy already chosen by the other player, is opted…
Q: Suppose Clancy and Eileen are playing a game in which both must simultaneously choose the action…
A: Clancy When Eileen plays left, best response of Clancy is to play left(6>4) When Eileen plays…
Q: Two companies are playing an entry game. In the first stage of the game the incumbent firm decides…
A: If the incumbent firm chooses to invest and the rival firm does not enter the market, the incumbent…
Q: Firm A: High Price A: $6 В: $6 Low Price A: $8 High Price B: -$2 Firm B: A: -$2 B: $8 A: $0 B: $0…
A: Cartel agreement is the aggregate between firms to charge a certain price.
Q: Consider the following game (anachronistically) called the battle of the sexes. Two brothers, Shahid…
A: We have given the game called the battle of sexes. Row player = Jamil Column player = Shahid Let…
Q: Suppose Andrew and Beth are playing a game in which both must simultaneously choose the action Left…
A: Game theory is the study of how interacting choices of economic agents produce outcomes with respect…
Q: Suppose that two firms, firm A and firm B, are competing in the market. Assume that each firm has…
A: This pay-off matrix shows the normal form game of both the players along with their strategies.
Q: Two oligopolistic aluminium manufacturers are engaged in bitter competition with one another. Both…
A: Since you have asked multiple question, we will solve the first question for you. If yo want any…
Q: Suppose that Camel and Marlboro are the only two firms that sell cigarettes. The following payoff…
A: There are two firms, i.e., Camel and Malboro which sell cigarettes. If camel advertise and Marlboro…
Q: Consider a two-player, sequential-move game where each player can choose to play right or left.…
A: Nash Equilibrium:- The Nash equilibrium can be explained as a game theory decision-making hypothesis…
Q: Levi Strauss and Wrangler are planning new generation jeans and must decide on the colors for their…
A: Dominant strategy is the strategy that gives maximum payoff to a player irrespective of what other…
Q: Imagine two vendors (our players) who must simultaneously choose a location to position their…
A: Location game is the concept of the game theory where n number of players choose the location for…
Q: Suppose we have two ice cream sellers, Blue Cool Ice Cream and Red Mango Ice Cream, deciding where…
A: We are going to learn the process about iterated dominance equilibrium to answer this question.
Q: Two companies have to choose their prices at the same time, at either high (pH) or low (pL) levels.…
A: Nash equilibrium refers to the solution or best outcome of a specific game when using game theory to…
Q: Two oligopolistic aluminium manufacturers are engaged in bitter competition with one another. Both…
A: Here in this example BAG and LAG both jave the dominance startegy over others strategy . Nash…
Q: Dairy King Advertise Doesn't Advertise Advertise 8, 8 15, 2 Creamland Doesn't Advertise 2, 15 11, 11
A: Solution: 1) If Creamland decides to advertise, it will earn a profit of $8 million if Dairy…
Q: Consider the strategic form game represented by the following bimatrix, where player 1 is the row…
A: The given matrix is:
Q: Consider the following "location game." There are two ice cream sellers (Seller 1 and Seller 2) in a…
A: Location Game is defined as a kind of a pervasive game where the game evolves around the players…
Q: This table shows a game played between two firms, Firm A and Firm B. In this game each firm must…
A: Matrix games are two player zero-sum games with finite strategy sets. Matrix games are interesting…
Q: Suppose there are two firms (F1 and F2) producing identical product competing for market share and…
A: Hello. Since your question has multiple sub-parts, we will solve first three sub-parts for you. If…
Q: Farmer Jones and Farmer Smith graze their cattle on the same field. If there are 20 cows grazing in…
A: Nash equilibrium is a concept in game theory when the player maintains their original idea despite…
Q: Q1. A and B are the only two sandwich shops serving in a small town. Each shop can choose to set a…
A: Note: We’ll answer the first question since the exact one wasn’t specified. Please submit a new…
Q: Untied and Air ’R’ Us are the only two airlines operating flights between Collegeville and Bigtown.…
A: Part A) If Air R charges low price, it's better for Untied to charge lower cost as its profit is…
Q: PLAYER B LEFT…
A: Nash Equilibrium is a concept which exists in the subject Game Theory, wherein the outcome that is…
Q: Suppose we have two ice cream sellers, Blue Cool Ice Cream and Red Mango Ice Cream, deciding where…
A: In a situation where two players are at a position where is no one has any need/incentive to…
Q: Boeing and Airbus are the two primary producers of passenger aircraft. Both firms are preparing to…
A: Two features can be maximized: Comfort The number of seats If both firms choose to maximize the…
Q: When you are with a young child and want to show them something fun and new, there is the risk that,…
A: Answer -
Q: Suppose that Creamland and Dairy King are the only two firms that sell ice cream. The following…
A: In game theory, the best response is the strategy (or strategies) which produces the most favorable…
Q: Consider this market that is dominated by two airlines, American and United. Each can choose to…
A: A dominant strategy is such strategy that the player opts each time, no matter the strategy chosen…
Q: Suppose we have two ice cream sellers, Blue Cool Ice Cream and Red Mango Ice Cream, deciding where…
A: We are going to use weakly dominant and strictly dominant methodology to answer this question,
Q: In the incomplete information version of the Game of Chicken (see Tadelis 2013, Section 12.2.1),…
A: Chicken Game : Two Players : Player 1 & Player 2 Two strategies to choose : (Straight ) ,…
Q: Two duopolists are sharing a market in which they are contemplating whether to compete or to…
A: A game theory refers to the process of interaction between various players' actions and outcomes…
Q: Consider this market that is dominated by two airlines, American and United. Each can choose to…
A: Nash equilibrium refers to the situation where there is no incentive for both the player deviates…
Q: For example, the lower-left cell shows that if Flashfone prices low and Pictech prices high,…
A: The game theory is the investigation of the manners by which communicating decisions of monetary…
Q: Which of the following statements about the classic Cournot duopoly model is incorrect? 1)The…
A: Oligopoly market structure is the market structure in which there are few large firms in the market…
Q: Two oligopolistic aluminium manufacturers are engaged in bitter competition with one another. Both…
A: In game theory, strategic dominance arises when one strategy outperforms another for a single…
Q: Suppose we have two ice cream sellers, Blue Cool Ice Cream and Red Mango Ice Cream, deciding where…
A: A game strategy is said to be dominated when the strategy taken by the player is not giving the…
Q: Imagine a two-player game that proceeds as follows. A pot of money is created with $6 in it…
A: A subgame perfect equilibrium ( that is also known as a subgame perfect Nash equilibrium) is…
Q: Sometimes oligopolies in the same industry are very different in size. Suppose we have a duopoly…
A: Firm A: If firm A cheats and firm B colludes than firm A will get maximum payoff. But if firm B also…
Q: On a duopolistic market, two tobacco firms are considering separately whether or not to engage in a…
A: [a] A dominant strategy is a strategy that a player will always follow irrespective of the game…
Q: In a three stage alternating offers bargaining game, player 1 demands a fraction x of $100. If this…
A: Meaning of Decision Theory under Nash Equilibrium: The term decision theory refers to the…
Q: Sometimes oligopolies in the same industry are very different in size. Suppose we have a duopoly…
A: Given Firm B colludes with Firm A Firm B cheats by selling more output Firm A colludes…
Q: Suppose that Creamland and Dairy King are the only two firms that sell ice cream. The following…
A:
Q: To advertise or not to advertise Suppose that Creamland and Dairy King are the only two firms…
A: Hi , as you have posted multiple questions , we are only allowed to solve only first 3 subparts at a…
Q: Deborah Left Right Left 8, 4 4, 5 Carlos Right 5, 4 6, 5 Left Right The only dominant strategy in…
A: Given pay matrix:- As per given information:- When Carlos chooses 'Left', Deborah will choose…
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- Suppose Carlos and Deborah are playing a game in which both must simultaneously choose the action Left or Right. The payoff matrix that follows shows the payoff each person will earn as a function of both of their choices. For example, the lower-right cell shows that if Carlos chooses Right and Deborah chooses Right, Carlos will receive a payoff of 6 and Deborah will receive a payoff of 5. Deborah Left Right Carlos Left 8, 4 4, 5 Right 5, 4 6, 5 The only dominant strategy in this game is for to choose . The outcome reflecting the unique Nash equilibrium in this game is as follows: Carlos chooses and Deborah chooses .Untied and Air ’R’ Us are the only two airlines operating flights between Collegeville and Bigtown. Each airline can charge either a high price or a low price for a ticket. The accompanying matrix shows their payoffs, in profits per seat (in dollars), for any choice that the two airlines can make. Suppose the two airlines play a one-shot game—that is, they interact only once and never again. What will be the Nash (noncooperative) equilibrium in this one-shot game? Explain why this is the likely outcome. Now suppose the two airlines play this game twice. Each airline then considers the future and decides on a “tit-for-tat” strategy, that is, it starts off charging the high price in the first period, and then in the second period it does whatever the other airline did in the previous period. If both play this…Solving for dominant strategies and the Nash equilibrium Suppose Felix and Janet are playing a game in which both must simultaneously choose the action Left or Right. The payoff matrix that follows shows the payoff each person will earn as a function of both of their choices. For example, the lower-right cell shows that if Felix chooses Right and Janet chooses Right, Felix will receive a payoff of 3 and Janet will receive a payoff of 7. Attached the table The only dominant strategy in this game is for (Janet / Felix) to choose (Left / Right). The outcome reflecting the unique Nash equilibrium in this game is as follows: Felix chooses (Left / Right) and Janet chooses (Left / Right).
- Suppose that two players are playing the following game. Player 1 can choose either Top or Bottom, and Player 2 can choose either Left or Right. The payoffs are given in the following table: Player 1 Player 2 Left Right Top 6 1 9 4 Bottom 2 4 5 3 where the number on the left is the payoff to Player 1, and the number on the right is the payoff to Player 2. D) What is Player 1’s maximin strategy?E) What is Player 2’s maximin strategy?F) If the game were played with Player 1 moving first and Player 2 moving second, using the backward induction method we went over in class, what strategy will each player choose?Imagine that there are two snowboard manufacturers (FatSki and WideBoard) in the market. Each firm can either produce ten or twenty snowboards per day. The table below (see attached) shows the profit per snowboard for each firm that will result given the joint production decisions of these two firms. Draw the game payoff matrix for this situation. Does either player have a dominant strategy? If so, what is it? What is the Nash equilibrium solution and how many boards should each player produce each day? Since FatSki and WideBoard must play this game repeatedly (i.e. make production decisions every day), what strategy would you advise them to play in order to maximize their payoff over the long term?Suppose there are only two firms that sell smartphones, Flashfone and Pictech. The payoff matrix that follows shows the profit (in millions of dollars) each company will earn, depending on whether it sets a high or low price for its phones. For example, the lower-left cell shows that if Flashfone prices low and Pictech prices high, Flashfone will earn a profit of $6 million and Pictech will earn a profit of $1 million. Assume this is a simultaneous game and that Flashfone and Pictech are both profit-maximizing firms.
- Alice and Betsy are playing a game in which each can play either of two strategies, leave or stay. If both play the strategy leave, then each gets a payoff of $400. If both play the strategy stay, then each gets a payoff of $800. If one plays stay and the other plays leave, then the one who plays stay gets a payoff of $C and the one who plays leave gets a payoff of $D. When is the outcome where both play leave a Nash equilibrium? a) never, since 800 > 400 b) when 400 > C and D > 800 but not when 800 > D c) whenever 400 > C d) when D > C and C > 400 e) whenever d < 800Suppose Carlos and Deborah are playing a game in which both must simultaneously choose the action Left or Right. The payoff matrix that follows shows the payoff each person will earn as a function of both of their choices. For example, the lower-right cell shows that if Carlos chooses Right and Deborah chooses Right, Carlos will receive a payoff of 7 and Deborah will receive a payoff of 6. The only dominant strategy in this game is for ____ to choose ____ . The outcome reflecting the unique Nash equilibrium in this game is as follows: Carlos chooses ____ and Deborah chooses ____ .Two firms A and B compete on price. They can choose a low or high price. Firm A is smaller than firm B, and typically earn a lower payoff. For instance if both firms offer a low price firm A earns $400, and B $500, and if they both offer a high price Firm A earns just $400, while firm B earns $1,000. However, when Firm A offers a low price and B a high price firm A can gain an advantage and will earn $600, while B will earn $400. Finally, if the situation is reversed and B offers a low price and B a high price, B will steal the market and earn $1,500 while A will earn nothing. Please construct a payoff matrix for this situation Does Firm A have a dominant strategy?
- Consider the following game, called matching pennies, which you are playing with a friend. Each of you has a penny hidden in your hand, facing either heads up or tails up. You know which way the penny is facing in your own hand. On the count of three, you simultaneously show your pennies to each other. If the face-up side of your coin matches your friends, you get to keep both pennies. If they do not match, your friend gets to keep both. a. Who are the players in this game? What are each player’s strategies? b. Construct a payoff matrix for this game. c. Does either player have a dominant strategy? Explain d. Is there a Nash equilibrium? Explain.For the questions that ask you to draw the games, you can either draw them on the computer, or draw them by hand and then insert a picture. The table function in word works well for drawing these games, and was what I used. Part 1: Dominant and dominated strategies In the following games, identify any dominant or dominated strategies. Specify whether the strategy is strictly or weakly dominant/dominated. Then use dominant and/or dominated strategies to provide the solution to the game. Player 2 Player 1 Left Right Up 4, 1 2, 4 Down 1, 2 3, 3 Player 2 Player 1 Left Center Right Up 7, 3 8, 6 4, 9 Middle 1, 8 5, 7 3, 4 Down 2, 1 9, 5 6, 2 Player 2 Player 1 Left Center Right Up 2, 1 3, 6 7, 5 Middle 0, 8 7, 7 3, 5 Down 2, 2 4, 1 3, 1 Assume there is some deadly airborne disease. Assume that…PLAYER B LEFT RIGHT UP 5 FOR A, 30 FOR B 10 FOR A, 12 FOR B PLAYER A DOWN -2 FOR A, 10 FOR B 8 FOR A, 15 FOR B In the above game, the players are seeking to maximize the number they recieve. They choose at the same time. What is the Nash equillibrium? Player A will choose UP and player B will choose LEFT Player A will UP and player B will choose RIGHT Player A will choose DOWN and player B will choose LEFT Player A will choose DOWN and player B will choose RIGHT Player A will choose LEFT and player B will choose UP Player A will choose LEFT and player B will choose DOWN Player A will choose RIGHT and player B will choose UP Player A will choose RIGHT and player B will choose DOWN