The mixed stratergy nash equalibrium consists of : the probability of firm A selecting October is 0.692 and probability of firm A selecting December is 0.309. The probability of firm B selecting October is 0.5 and probability of firm selecting December is 0.5.In the equilibrium you calculated above, what is the probability that both consoles are released in October? In December? What are the expected payoffs of firm A and of firm B in equilibrium? Two firms A and B manufacture video game consoles. Firm A's console is less tech-nologically advanced than that of firm B, and firm A knows that if consumers get tochoose between both consoles at the same time, they would choose the console of firmB. Therefore, firm A's only chance to sell a large number of consoles is to release it ata different time than firm B. Firm B prefers to release the console at the same time asfirm A to benefit from the hype and blog reviews.Suppose first that the firms have to commit to a release date in advance. Firms canchoose to release the console either in October or in December. Therefore, while thegame has some dynamic aspect, we can think of the choice of the release date as asimultaneous move game, represented by the payoff matrix below.A \ BOctoberOctober(10, 100)December (50, 50)December(100, 50)(10, 100)

Nash equilibrium is a fundamental concept in game theory, named after mathematician John Nash. It…

The mixed stratergy nash equalibrium consists of : the probability of firm A selecting October is 0.692 and probability of firm A selecting December is 0.309. The probability of firm B selecting October is 0.5 and probability of firm selecting December is 0.5. In the equilibrium you calculated above, what is the probability that both consoles are released in October? In December? What are the expected payoffs of firm A and of firm B in equilibrium?

The mixed stratergy nash equalibrium consists of : the probability of firm A selecting October is 0.692 and probability of firm A selecting December is 0.309. The probability of firm B selecting October is 0.5 and probability of firm selecting December is 0.5. In the equilibrium you calculated above, what is the probability that both consoles are released in October? In December? What are the expected payoffs of firm A and of firm B in equilibrium?

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter8: Game Theory

Section: Chapter Questions

Problem 8.7P

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