MICROECONOMICS (LL) W/CONNECT ACCESS
MICROECONOMICS (LL) W/CONNECT ACCESS
21st Edition
ISBN: 9781264197163
Author: McConnell
Publisher: MCG CUSTOM
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Chapter 14, Problem 9DQ
To determine

How monopolistic competition differs from pure competition.

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4 Consider an extensive game where player 1 starts with choosing of two actions, A or B. Player 2 observes player 1’s move and makes her move; if the move by player 1 is A, then player 2 can take three actions, X, Y or Z, if the move by player 1 is B, then player 2 can take of of two actions, U or V. Write down all teminal histories, proper subhistories, the player function and strategies of players in this game.
Q14. Do players have perfect information in the above game? Yes, all of them have perfect information   No, player 2 has imperfect information   No, player 3 has imperfect information   No, no player has perfect information     Q15. If we want to describe the above game with a strategic form representation, what would the strategy sets for the three players be?  Player 1={a, b, c} ; Player 2={x, y}; Player 3={r, s}   Player 1={a, b, c} ; Player 2={xx, xy, yx, yy}; Player 3={r, s}
Newfoundland’s fishing industry has recently declined sharply due to overfish- ing, even though fishing companies were supposedly bound by a quota agree- ment. If all fishermen had abided by the agreement, yields could have been maintained at high levels. LO4 Model this situation as a prisoner’s dilemma in which the players are Company A and Company B and the strategies are to keep the quota and break the quota. Include appropriate payoffs in the matrix. Explain why overfishing is inevitable in the absence of effective enforcement of the quota agreement. Provide another environmental example of a prisoner’s dilemma. In many potential prisoner’s dilemmas, a way out of the dilemma for a would-be cooperator is to make reliable character judgments about the trustworthiness of potential partners. Explain why this solution is not avail- able in many situations involving degradation of the environment.
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