EBK FOUNDATIONS OF ECONOMICS
8th Edition
ISBN: 8220103632225
Author: PARKIN
Publisher: PEARSON
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Question
Chapter 18, Problem 5MCQ
To determine
To choose:
The option that correctly explains the Nash equilibrium.
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Students have asked these similar questions
In a game, a Nash equilibrium is reached only if the players ________.
a.
understand the game and the payoffs associated with each strategy
b.
use backward induction to develop their strategies
c.
follow a mixed strategy
d.
have no best response for the choices made by other players
What is the Nash Equilibrium in a game? A. A situation where all players cooperate for maximum gain B. A situation where no player can improve their outcome by changing their strategy unilaterally C. A situation where players always choose the same strategy D. A situation where players randomly select strategies
Answer all the questions, show all the working.
Consider the following game in normal form.
Not cooperate
Cooperate
Not cooperate
20,20
50,0
Cooperate
0,50
40,40
What is Nash equilibrium? Is it efficient? Why?
What needs to be complied with so that the players would like to cooperate? What happens when one of the players does not cooperate? Why? Define trigger strategy.
Calculate the discount factor (δ) that would make both players decide to cooperate.
Chapter 18 Solutions
EBK FOUNDATIONS OF ECONOMICS
Ch. 18 - Prob. 1SPPACh. 18 - Prob. 2SPPACh. 18 - Prob. 3SPPACh. 18 - Prob. 4SPPACh. 18 - Prob. 5SPPACh. 18 - Prob. 6SPPACh. 18 - Prob. 7SPPACh. 18 - Prob. 8SPPACh. 18 - Prob. 1IAPACh. 18 - Prob. 2IAPA
Ch. 18 - Prob. 3IAPACh. 18 - Prob. 4IAPACh. 18 - Use this information to work Problems 5 to 7. DOJ...Ch. 18 - Use this information to work Problems 5 to 7. DOJ...Ch. 18 - Prob. 7IAPACh. 18 - Which of the following statements is incorrect. In...Ch. 18 - If firms in oligopoly form a cartel, it will...Ch. 18 - Prob. 3MCQCh. 18 - Prob. 4MCQCh. 18 - Prob. 5MCQCh. 18 - Prob. 6MCQCh. 18 - Prob. 7MCQ
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- GAME THEORY: Two countries produce oil. The per unit production cost of Country 1 is C1 = $2 and of country 2 it is C2 = $4. The total demand for oil is Q = 40-p where p is the market price of a unit of oil. Each country can only produce either 5 units, 10 units or 15 units. The total production of the two countries in a Nash equilibrium is: A. 10 B. 15 C. 20 D. 25 E. 30arrow_forwardA B 2 2 C 3,2 D 2,1 E 1,1 F In this game, the strategy profile (B.CE) is 4 2.2 not a Nash equilibrium a subgame imperfect Nash equilibrium a subgame perfect Nash equilibriumarrow_forward1. Draw a normal form for this tree. 2. Find all the subgames in the tree. 3. Find SPNE (Subgame Perfect Nash Equilibrium) of the tree and explain how it works.arrow_forward
- Define the prisoner’s dilemma game. The prisoner’s dilemma game is a: two-person noncooperative sequential game that demonstrates the difficulty of cooperative behavior in certain circumstances. two-person cooperative simultaneous game that demonstrates the difficulty of cooperative behavior in certain circumstances. two-person noncooperative simultaneous game that demonstrates the difficulty of cooperative behavior in certain circumstances. two-person cooperative sequential game that demonstrates the difficulty of cooperative behavior in certain circumstances. a. What assumptions lead to the dilemma? If the prisoners confess, each would get a light sentence. But each prisoner is interrogated separately and is offered the chance to go free if he or she confesses to the crime and agrees to serve as a witness against the other prisoner. This creates the incentive for both prisoners to not confess. If the prisoners do not confess, each would get a…arrow_forwardDiscuss main motivations to use the Nash Equilibrium as a solution concept.arrow_forward8) Consider the following game: There are 10 players. Each player is asked to write a number between 0 and 100. The player whose choice is closest to half of the average is the winner. Describe the game and discuss what would you expect to be the average number if the game were played in class with your colleagues. Do you expect them to play the Nash equilibrium strategy? Explain.arrow_forward
- For the game below, find any Nash equilibrium. Show your work and report any Nash equilibrium strategies.arrow_forward"Set up the oligopoly method and explain the strategies and you reach the nash equilibrium? "arrow_forwardFind any Nash equilibria in the game below. Firm B Co-operate Don’t co-operate Firm A Co-operate 60 60 0 80 Don’t co-operate 80 0 10 10 a. There is one Nash equilibrium: both firms don't co-operate. b. There are no Nash equilibria. c. There are two Nash equilibria: one firm co-operates and the other firm doesn't co-operate. d. There are two Nash equilibria: (i) both firms co-operate and (ii) both firms don't co-operate.arrow_forward
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