1. Consider a firm and a union bargaining over how to split the firm’s revenue (which...
1. Consider a firm and a union bargaining over how to split the firm’s revenue (which we assume is $100). The firm first makes an offer of an amount it will give the union (which goes to the workers as wages). Assume the firm has to choose the amount in multiples of 50. After the firm has made its offer, the union chooses whether to accept or reject. If it accepts, the revenue is divided accordingly; assume payoffs of each player are equal to the amount of revenue received. If the union rejects, there is a strike and both firm and union get a payoff of 0.
a. (8pts) Write a game tree for this game, with actions labelled and payoffs written in.
Homework Answers
The solution of this problem would be........
![Game Tree Firm Players Strategy 1/ strategy no offer to union [ & 100, offer to union (player 2 union) 1750,150] strategy str](http://img.homeworklib.com/questions/01760aa0-79a6-11ea-827d-3ffa7caf29f4.png?x-oss-process=image/resize,w_560)
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1. Consider a firm and a union bargaining over how to split the
firm’s revenue (which...
Consider a firm and a union bargaining over how to split the firm’s revenue (which we...
Consider a firm and a union bargaining over how to split the firm’s revenue (which we assume is $100). The firm first makes an offer of an amount it will give the union (which goes to the workers as wages). Assume the firm has to choose the amount in multiples of 50. After the firm has made its offer, the union chooses whether to accept or reject. If it accepts, the revenue is divided accordingly; assume payoffs of each player...
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1. Consider the coupon game. But suppose that instead of decisions being made simultaneously, they are made sequentially, with Firm 1 choosing first, and its choice observed by Firm 2 before Firm 2 ma...
1. Consider the coupon game. But suppose that instead of
decisions being made simultaneously, they are made sequentially,
with Firm 1 choosing first, and its choice observed by Firm 2
before Firm 2 makes its choice.
a. Draw a game tree representing this game.
b. Use backward induction to find the solution. (Remember that
your solution should include both firms’ strategies, and that Firm
2’s strategy should be complete!)
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Consider the following bargaining game in which two players are trying to share a cake of size 1. Player 1 offers ri e [o, 1jand player 2 either accepts (Y) of rejects (N): If player 2 accepts player 1 receives a payoff of ri and player 2 receives 1-1. If player 2 rejects, then player 2 moves again to offer 72 [0, 1] to which player 1 responds by either accepting (Y) or rejecting (N): If player 1 accepts player...
Problem 1. Ultimatum Game with Inequality Aversion Players 1 and 2 are in an ultimatum game and will divide a particular good. 1-1. . Playe r l offers a division ( r, y) with ® and y nonnegative and If Player 2 accepts this offer then Player 1 will receive the fraction r of the good and Player 2 will receive the fraction y . If Player 2 rejects the offer, then both players receive zero. . The value a...
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1. Consider the coupon game. But suppose that instead of
decisions being made simultaneously, they are made sequentially,
with Firm 1 choosing first, and its choice observed by Firm 2
before Firm 2 makes its choice.
a. Draw a game tree representing this game.
b. Use backward induction to find the solution. (Remember that
your solution should include both firms’ strategies, and that Firm
2’s strategy should be complete!)
2. Two duopolists produce a homogeneous product, and each has a...
1) Decreasing returns to scale may occur as increasing the amount of inputs used A) increases specialization B) may cause coordination difficulties. C) always increases the amount of output produced D) increases efficiency. 2) Which of the following statements is NOT true? A) AFC = AC - AVC C) AVC = wage/MPL B) AC = AFC + AVC D) C=F-VC 3) The more elastic the demand curve, a monopoly A) will have a larger Lemer Index. will face a lower...
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