Question

с 1. Basic Game Theory (21 points) It Consider the following game Player 2 ID Player 1 A 20,22 21.24 B 18,23 20.18 f No: no A. (6 points) Does player I have a dominant strategy. If yes, describe it. "Velthen Planchonit in one of B. (9 points) Can this game be solved by the elimination of dominated strategy? If yes, describe your method and result in detail C. (6 points) Now suppose there is some change to the payoff matrix, find the Nash equilibrium for the new game below: Player 2 28. 13 29, 19 Player 1 A B 27.14 23, 18 2. Price Discrimination (24 points) First indicate the types of price discrimination for the cases below. Then explain the differences between the different types of price discrimination that you find in these examples. Enames Case A. AL ABC Yoga studio the price of a single yoga class is S18, a five-class yoga pass o San (expires in two months) costs $80, and a ten-class pass (expires in four months) costs $150. It also offers the weekday morning class special discount: one month of unlimited weekday classes volan before 2pm at $109.99 (a one month unlimited class costs $139.99). Moreover it offers one month Bitteren unlimited yoga classes to the first time new customers at $59.99. Case B: Pop singer XXX is announcing a concert tour starting next summer, and there is a 10% "early bird" discount for those who order the ticket before this thanksgiving. For the loyal fans who have always been actively participating in XXX's official fan club in the last two years there is a 20% discount for the ticket. Moreover anyone who buys the ticket can snjoy a 106 discount when they also shop at XXX's online merchandise store. Serennin und 3. Cournot Competition (26 points) Consider a Cournot model. The market demand is p-200-91-9. Firm I's marginal cost is 20, and firm 2's marginal cost is also 20. There are no fixed costs. A. (10 points) Derive the best response function for each firm. B. (6 points) Find the Nash Equilibrium. 15 points) Find the equilibrium market price and each firm's equilibrium profit.

Answer 1

Player 2 Player 1 D A 20,22 A 20,22 B 18, 23 21,24 3o, i8 B Players have dominant stategy as playing "Al belause players best strategy is to play independent of them when plagen & plays Yes Strategy B will be dominated strategy 4 can be eliminated by player 2. then given player I plays A, Play, 2 plays D. CAD) į a NÊ. .: c Raya 2D Player 1 A 27,14 28,13 B 23, 18 29,19 (A,C) & (B,D) are two pure strategy Nash eq?