Question

Question 2 8 pts Use the payoff matrix to answer the following questions Firm Strategy А B х 8,8 18.-4 Firm Y -4,18 10.10 1.12 points) Does Firm have a dominant strategy? If so, what is it? 2.12 points) Identify all of the Nash equilibrium positions. If there is no Nash equilibrium, indicate 'None." 3.(2 points) Assume this is a one-shot, simultaneous game. Where will the game end? If the end game cannot be predicted indicate "No prediction possible 4.(2 points) What is the maximum interest rate at which collusion could occur between these firms with a trigger strategy of the game is played an infinite number of times? You must show your calculation to receive credit. Upload Choose a File

Answer 1

In a one shat game, (x, A) is a Noshig Frenk B A 8, 8 4, 18 18,-4 10,lo foin J Y * A Front déminent strategy is Freink dominant strategy is Nash eq (X: A is a pure strategy 4 @ Expects payoff from la toatloder-- collusion 10/15 Axpe payoff from 18+ 88+85² + + Deviaron 18+ 85 18. Thus 10 > 18+88 1-8 70-80 >18-188 lod 8 6 7 8 14 0.8 130.81+0.8 0-2 70-81 Tito <0.25 ma