The trade war between the United States and China is an example of an anti-coordination game. a Prisoner's Dilemma. O a second mover’s advantage. a first mover’s advantage.
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- The story is between USA & China. They are involved in trade war over the last couple of years. Consequently, once USA attempted to increase 25% tariff rate for China. China also responded immediately by increasing their tariff rate against USA. As a result, the trade activities have become vet difficult between them. Task: ⚫ Plot their Situation into a game matrix • Game 3 ⚫ Find out the preference list of both parties ⚫ Write down a paragraph describing the situation of both partiesGame theory. Pretend you're in the following situation: A and B are two different cloth making enterprises. Both companies A and B were successful in bringing their products to market. However, because company A was the first to make a move, a significant portion of the country's population chose to use the product manufactured by company A because they had already established a positive reputation in the market. Although the revenues of company A were increasing, the company B was struggling to maintain its position in the market with their goods. Because firm A was the first to make a move, it enjoys a competitive advantage over company B in the marketplace. 1. Prove that the situation IS а game (explain strategic interaction/conflict) and solve the game with appropriate approach.V2. Suppose two large countries are deciding whether to impose a tariff on each other. (a) Use a payoff matrix and graphs to show the payoffs associated with each of the scenarios; (b) Identify the Nash Equilibrium in a non-cooperative game. (c) How can a cooperative trade agreement change the equilibrium?
- Use the following normal-form game to answer the following question. Player 2 Player 1 Strategy C D A 30,30 70,0 B 0,70 60,60 Identify the one-shot equilibrium Suppose the players know this game will be repeated three times. Can they achieve payoffs that are better than the one-shot game Nash Equilibrium? Explain. Suppose the game is infinitely repeated and the interest rate is 6%. Can the player achieve payoffs that are better than the one-shot game equilibrium? Explain.Use the following normal-form game to answer the questions below. Player 2 Strategy C D Player 1 A 50, 50 120, 25 B 25, 120 55, 55 a. Identify the one-shot Nash equilibrium.multiple choice 1 (B,C) (B,D) (A,C) (A,D) b. Suppose the players know this game will be repeated exactly three times. Can they achieve payoffs that are better than the one-shot Nash equilibrium?multiple choice 2 No Yes c. Suppose this game is infinitely repeated and the interest rate is 6 percent. Can the players achieve payoffs that are better than the one-shot Nash equilibrium?multiple choice 3 No Yes d. Suppose the players do not know exactly how many times this game will be repeated, but they do know that the probability the game will end after a given play is θ. If θ is sufficiently low, can players earn more than they could in the one-shot Nash equilibrium?multiple choice 4 Yes NoExercise 6.1Suppose that two airlines decide to collude. Analyse the game between these two companies. Suppose that each of them can charge for tickets a high price or a low price. If one of them charges 100 euros, it gets few profits if the other also charges 100 euros and high profits if the other charges 200 euros. On the other hand, if the company charges 200 euros, it obtains very little profit if the other charges 100 euros and an average profit if the other also charges 200 euros. a) Represent the matrix of results of this game. b) What is the Nash equilibrium in this game? Explain your answer. c) Is there an outcome that would be better than the Nash equilibrium for the two airlines? How could it be achieved? Who would lose out if it were reached?
- Question 4: (Answer in 200-400 words in total PLEASE ANSWER THIS HOMEWORK QUESTION The purpose of the Paris agreement was to set a coordination mechanism between countries and limit carbon emissions at a global level. In this period of climate emergency, high carbon emissions and the non respect of Paris agreement by numerous countries, have been criticized in the newspapers and described as dangerous for future generations. From a game theory perspective, respecting or not the Paris agreement can be modeled as a strategic game. Let’s assume that we have two countries who can choose between option 1: not respecting and exiting the Paris agreement (increase their carbon emission); and option 2: respecting the Paris agreement (limit their carbon emission). The following matrix gives the payoffs of each choice, where in each cell, the first number is the payoff of country A and the second number is the payoff of country B. Country B Repect the agreement Exiting the…Game Theory 1) Explain your reasoning- Consider a vote being taken by a group of friends A, B and C They are trying to decide which of the three elective courses to take together in this term (Each one has a different concentration and is taking required courses in her field for the rest of her courses) Their choices are Economics, Accounting and Finance and their preferences for three courses are as shown Player A Player B Player C Economics Finance Accounting Accounting Economics Finance Finance Accounting Economics They have decided to have a two-round vote: alternative X is first paired with alternative Y, the alternative which gets a majority is then paired against alternative Z – the majority winner in this round is the final choice Player A won the right to choose the order How should she proceed? How would your answer change if you would consider 2n+1 friends where n of them are of type B and n are of type C? 2) A professor of game theory recognizes that every hour…Game theory can capture strategic situations where your outcome depends not only upon your own choice but also upon the choice of another. Present a coordination game of your choice where you and another player each have two choices or strategies. Explain in words the Nash Equilibrium concept, and identify the Nash equilibrium or Nash equilibria for your game. Explain why the outcomes that are not Nash equilibria are not.
- In Game 1 below, the US and Iran are bargaining over the state of Iran’s nuclear program. The US must first decide whether to impose sanctions on Iran or propose a compromise. If the US imposes sanctions, Iran can either back down or retaliate. If the US proposes a compromise, Iran can either accept it or accelerate its nuclear effort. If Iran does the latter, the US can either back down (i.e., the US is “weak”) or conduct an air strike (i.e., the US is “strong”). The background to this game is similar to ones we have discussed before. Iran’s nuclear program can range from 0 to 1, where 0 means no nuclear program and 1 means a fully functioning nuclear weapon. Any intermediate compromise X (which must lie between 0 and 1, 0 < X < 1) gives Iran a utility of X and the US a utility of 1-X. Payoffs for the other outcomes are as shown in the cells: the top number represents the US payoff, and the bottom number represents Iran’s payoff. (Don’t worry about where these numbers come…In Game 1 below, the US and Iran are bargaining over the state of Iran’s nuclear program. The US must first decide whether to impose sanctions on Iran or propose a compromise. If the US imposes sanctions, Iran can either back down or retaliate. If the US proposes a compromise, Iran can either accept it or accelerate its nuclear effort. If Iran does the latter, the US can either back down (i.e., the US is “weak”) or conduct an air strike (i.e., the US is “strong”). The background to this game is similar to ones we have discussed before. Iran’s nuclear program can range from 0 to 1, where 0 means no nuclear program and 1 means a fully functioning nuclear weapon. Any intermediate compromise X (which must lie between 0 and 1, 0 < X < 1) gives Iran a utility of X and the US a utility of 1-X. Payoffs for the other outcomes are as shown in the cells: the top number represents the US payoff, and the bottom number represents Iran’s payoff. (Don’t worry about where these numbers come…Game theory Nash equilibrium 1. A slight increase in the marginal cost of a firm definitely leads to a reduction in its output if the firm competes in the: A. Sweezy fashion. B. Cournot fashion. C. Bertrand fashion. D. Cournot fashion and Bertrand fashion. Please explain your answer 2. The market for widgets consists of two firms that produce identical products. Competition in the market is such that each of the firms independently produces a quantity of output, and these quantities are then sold in the market at a price that is determined by the total amount produced by the two firms. Firm 2 is known to have a cost advantage over firm 1. A recent study found that the (inverse) market demand curve faced by the two firms is P = 280 – 2(Q1 + Q2), and costs are C1(Q1) = 3Q1 and C2(Q2) = 2Q2. a. Determine the marginal revenue for each firm. b. Determine the reaction function for each firm.