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Wal-Mart Stores, Inc., is an enomously successful chain of discount retail stores started by Sam Walton in 1969. Wal-Mart's expansion strategy has been to charge less than ordinary department stores and small retal stores by relying on size and high-inventory tumover. Sam Walton began opening his stores in small Southwestem towns. By the mid-1970s, other discount chains realized that Wal-Mart has a profitable strategy. Since there are lots of small towns in the United States, a race ensued to see who could be the first to get to each town. Therefore, Wal-Mart found itself in a preemption game of the sort illustrated by the payoff matrbx to the right. Company X Enter Don't enter Enter -5, - 10 40, 0 Wal-Mart Don't enter 0, 40 0,0 The game's Nash equilibium (oquilibria) is (aro) for O A. Wal-Mart to enter and Company X to not enter and for both Wal-Mart and Company X to enter. O B. Wal-Mart to entor and Company X to not enter. Oc. Wal-Mart to enter and Company X to not enter and for Wal-Mart to not enter and Company X to enter. O D. Both Wal-Mart and Company X to enter. O E. Company X to enter and Wal-Mart to not enter. Now suppose Wal-Mart moves first. What will be the Nash equilibrium? The game's Nash equilibrium (equilibria) is (are) for O A. Both Wal-Mart and Company X to enter. O B. Wal-Mart to entor and Company X to not enter and for both Wal-Mart and Company X to enter. Oc. Company X to enter and Wal-Mart to not enter. O D. Wal-Mart to enter and Company X to not enter and for Wal-Mart to not enter and Company X to enter. O E. Wal-Mart to enter and Company X to not enter.

Wal-Mart Stores, Inc., is an enomously successful chain of discount retail stores started by Sam Walton in 1969. Wal-Mart's expansion strategy has been to charge less than ordinary department stores and small retal stores by relying on size and high-inventory tumover. Sam Walton began opening his stores in small Southwestem towns. By the mid-1970s, other discount chains realized that Wal-Mart has a profitable strategy. Since there are lots of small towns in the United States, a race ensued to see who could be the first to get to each town. Therefore, Wal-Mart found itself in a preemption game of the sort illustrated by the payoff matrbx to the right. Company X Enter Don't enter Enter -5, - 10 40, 0 Wal-Mart Don't enter 0, 40 0,0 The game's Nash equilibium (oquilibria) is (aro) for O A. Wal-Mart to enter and Company X to not enter and for both Wal-Mart and Company X to enter. O B. Wal-Mart to entor and Company X to not enter. Oc. Wal-Mart to enter and Company X to not enter and for Wal-Mart to not enter and Company X to enter. O D. Both Wal-Mart and Company X to enter. O E. Company X to enter and Wal-Mart to not enter. Now suppose Wal-Mart moves first. What will be the Nash equilibrium? The game's Nash equilibrium (equilibria) is (are) for O A. Both Wal-Mart and Company X to enter. O B. Wal-Mart to entor and Company X to not enter and for both Wal-Mart and Company X to enter. Oc. Company X to enter and Wal-Mart to not enter. O D. Wal-Mart to enter and Company X to not enter and for Wal-Mart to not enter and Company X to enter. O E. Wal-Mart to enter and Company X to not enter.

Principles of Economics 2e
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter9: Monopoly
Section: Chapter Questions
Problem 3SCQ: Suppose the local electrical utility, a legal monopoly based on economies of scale, was split into...
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Wal-Mart Stores, Inc., is an enomously successful chain of discount retail stores started by Sam Walton in 1969. Wal-Mart's expansion strategy has been to charge less than ordinary department stores and small retail stores by relylng on size and high-irnventory turmover. Sam Walton began opening his stores in small Southwestern towns. By the mid-1970s, other discount chains realized that Wal-Mart has a profitable strategy. Since there are lots of small towns in the United States, a race ensued to see who could be the first to get to each town. Therefore, Wal-Mart found itself in a preemption game of the sort illustrated by the payoff matrix to the right. Company X Enter Don't enter Enter -5, - 10 40, 0 Wal-Mart Don't enter 0, 40 0,0 The game's Nash equilibrium (squilibria) is (are) for O A. Wal-Mart to enter and Company X to not enter and for both Wal-Mart and Company X to enter. O B. Wal-Mart to enter and Company X to not enter. OC. Wal-Mart to enter and Company X to not enter and for Wal-Mart to not enter and Company X to enter. O D. Both Wal-Mart and Company X to enter. O E. Company X to enter and Wal-Mart to not enter. Now suppose Wal-Mart moves first. What will be the Nash equilibrium? The game's Nash equilibrium (equilibria) is (are) for O A. Both Wal-Mart and Company X to enter. O B. Wal-Mart to enter and Company X to not enter and for both Wal-Mart and Company X to enter. Oc. Company X to enter and Wal-Mart to not enter. O D. Wal-Mart to enter and Company X to not enter and for Wal-Mart to not enter and Company X to enter. O E. Wal-Mart to enter and Company X to not enter.
Transcribed Image Text:Wal-Mart Stores, Inc., is an enomously successful chain of discount retail stores started by Sam Walton in 1969. Wal-Mart's expansion strategy has been to charge less than ordinary department stores and small retail stores by relylng on size and high-irnventory turmover. Sam Walton began opening his stores in small Southwestern towns. By the mid-1970s, other discount chains realized that Wal-Mart has a profitable strategy. Since there are lots of small towns in the United States, a race ensued to see who could be the first to get to each town. Therefore, Wal-Mart found itself in a preemption game of the sort illustrated by the payoff matrix to the right. Company X Enter Don't enter Enter -5, - 10 40, 0 Wal-Mart Don't enter 0, 40 0,0 The game's Nash equilibrium (squilibria) is (are) for O A. Wal-Mart to enter and Company X to not enter and for both Wal-Mart and Company X to enter. O B. Wal-Mart to enter and Company X to not enter. OC. Wal-Mart to enter and Company X to not enter and for Wal-Mart to not enter and Company X to enter. O D. Both Wal-Mart and Company X to enter. O E. Company X to enter and Wal-Mart to not enter. Now suppose Wal-Mart moves first. What will be the Nash equilibrium? The game's Nash equilibrium (equilibria) is (are) for O A. Both Wal-Mart and Company X to enter. O B. Wal-Mart to enter and Company X to not enter and for both Wal-Mart and Company X to enter. Oc. Company X to enter and Wal-Mart to not enter. O D. Wal-Mart to enter and Company X to not enter and for Wal-Mart to not enter and Company X to enter. O E. Wal-Mart to enter and Company X to not enter.
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