Question

The payoff matrix shows Player A and Player B with three output choices: Q = 50, Q = 100, or Q = 150. In each cell, Player A's payoff is on the left and Player B's payoff is on the right. In this game, which of the following is true? Player B Player A 0-50 0-100 150 - 50 37,37 40.30 37,20 = 100 = 150 30.40 20.37 32. 32 15.25 25, 15 0.0 o Select one: a. In equilibrium, both firms choose Q = 50 ob. In equilibrium, both firms choose Q = 100 c. there are two equilibria, at Q = 50 and at Q = 100. O d. the only equilibrium is in mixed strategies e. the two equlibria are associated with the (40, 30) outcome and the (30, 40) outcome

Answer 1

Player B Player A 950 Q=100 Q=50 37,37 30,40 Q=100 40,30 32,32 Q=15037,20 25,15 ,-150 20,37 15,25 o O here to pay off whey 8.=100 8 = 150 B's Player A: from observation we can see that Player A will always have higher wy, compachoon to Io respectine player strategy Hence Player A will never choose Q=150 Now Payoff matrix becomes say the of Player A Player B Qa150 Player A Q=50 Q-50 37, 37 R=10040,30 B=100 30,40 32, 32 20131 15 25 1 Now We can clearly all that player B have Payoff when Q=100 irespectate of of Player strully fence player B will Play

Now ар oth rahix becomes: в Роди Ріди , -А д-р galo 9,2 100 30, чо 32 32. = (од Now Here Player will have digher Pay higher Payoff with Hence Player of will also choose Baleo - NE 132, 32g nym -100, 4 =loo3 Home kol, ев, К Е Р $ ч equilibium would Tehoose ан Qalbo Hence option (6) is correct.