Question

Questions 7-10 For each of the following games, please identify the Nash equilibrium or equilibria. (There may be none, or multiple). Note: assume the payoffs in the boxes are "positive" -- i.e. higher numbers represent better payoffs. Player 1 Player 2 Strategy Strategy #1 #2 Strategy A 20 B 100 #1 20 No a Strategy No 5 100 Player 2 Strategy Strategy Player 1 Strategy #1 Strategy Player 2 Strategy Strategy #1 #2 15 R 50 70 20 x 20 x 10 60 70 Player 2 Strategy Strategy #2 #2 #2 #1 #2 Strategy X 40 R 15 R30 #1 180 Player 1 20 Player 1 Strategy #1 Strategy #2 10 R60 Strategy #2 70 25 30 7. For game (6), which of the following are Nash Equilibria? A. A only B. B only C. Conly D. Donly E. A&B F. A&C G. A&D H. B&D I. None

Answer 1

a) A and D are the Nash equilibrium in this game, the answer is G, both the firms will choose either strategy 1 or both will choose strategy 2.

b) "C"

Only C is the Nash equilibrium in the market, as firm will choose strategy 1 and strategy 2 respectively.

c) "A" only is the Nash equilibrium.

d) "H"

B and D is the nash equilibrium.