Homework Answers
Ans is A
dominant strategy is a strategy which is played by a player irrespective of other players strategy.
Thus firm B gets the highest payoff when it plays Int irrespective of other players strategy.
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Each firm has a choice of advertising on television (TV), on the internet (Int) or on...
6. There are 2 firms in an oligopoly market: firm ABC and firm XYZ. They simultaneously...
6. There are 2 firms in an oligopoly market: firm ABC and firm XYZ. They simultaneously decide whether to spend on advertising. If both firms spend on advertising, the profit of each will be $80. If both firms do not spend on advertising, the profit of each will be $100. If only one firm spends on advertising, the firm with advertising carns $150 and the firm without advertising carns $30. (a) Complete the payoff matrix below. Advertising Advertising ABC: XYZ:...
8. -1 0. An advertising agency has developed Internet and television ads for a particular usiness. Each Internet ad costs $200 per run and each television ad costs $500 per run. The business does...
8. -1 0. An advertising agency has developed Internet and television ads for a particular usiness. Each Internet ad costs $200 per run and each television ad costs $500 per run. The business does not want the su m of Internet and television ads to be run to exceed 51 times. The agency estimates that each viewing of the Internet ad will reach 1000 people and each airing of the television ad will reach 1500 people. If the total amount...
Q4. There are two firms A and B in a homogenous product industry. Inverse demand is...
Q4. There are two firms A and B in a homogenous product industry. Inverse demand is P = 120 Q where Q is the combined output of the firms. Firm A has a marginal cost of 0 and firm B has a marginal cost of 10. There is an infinite sequence of periods in which firms simultaneously set prices. In this question we will consider whether the following collusive strategies with trigger strategy punish- ments are a subgame perfect Nash...
There are two firms, Cope and Peski, in an oligopolistic industry. Each firm must decide whether...
There are two firms, Cope and Peski, in an oligopolistic industry. Each firm must decide whether or not to advertise during the Super Bowl this year. The diagram below represents the matrix of expected profit payoffs for each firm depending on which of the four possible outcomes becomes reality. The first number in each cell represents the expected profit for Peski given the relevant combination of strategies for each firm. The second number in each cell represents the expected profit...
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!)
2. Two duopolists produce a homogeneous product, and each has a...
LLALJU 13. 13. 10.00 points Firm 1 and firm 2 are car producers. Each has the...
LLALJU 13. 13. 10.00 points Firm 1 and firm 2 are car producers. Each has the option of producing either a big car or a small car. The payoffs to each of the four possible combinations of choices are as given in the following payoff matrix. Each firm must make its choice without knowing what the other has chosen. Big car Firm 2 Big car 400 for firmn 1 400 for firmn 2 700 for firm 1 600 for firm...
Two profit-maximizing firms compete on prices. They must simultaneously select a price without the other firm...
Two profit-maximizing firms compete on prices. They must simultaneously select a price without the other firm knowing what that choice is. They can price at $9 per unit, $8 per unit or $7 per unit. Total demand for the product (Q = Q1+Q2) is given by Q = (10 – PL)*100, where PL is the lowest of the two prices posted. If they both post the same price they split the total demand evenly. If the lowest price is $1...
PART II: GAME THEORY A few months ago, Samsung revealed their new smartphone whose screen folds a...
Please help with question d
PART II: GAME THEORY A few months ago, Samsung revealed their new smartphone whose screen folds and unfolds according to the user's preferences. This addition seems so promising and profitable that Apple is planning to enter the market for foldable smartphones as well and is deciding on its production scale. Naturally, Samsung is ready to respond and should decide which pricing structure is the most convenient: setting a high price"accommodate) or starting a price war....
only two firms in the industry of eanera , A long time ago, Kodak and Fuji...
only two firms in the industry of eanera , A long time ago, Kodak and Fuji the identical cos t structure were thinking of advertising their product at an exhausting rate, a mild not advertising at all. Assume that currently they share a profit of $54 million each S60 million and by a mild rate $45 reaches $105 if both advertise By advertising at an exhausting rate results in a cost of million for each firm. On the other hand...
Consider the problem facing two firms in the fast-food restaurant market, Firm A and Firm B. Each company has just come...
Consider the problem facing two firms in the fast-food restaurant market, Firm A and Firm B. Each company has just come up with an idea for a new fast-food menu item, which it would sell for $6. Assume that the marginal cost for each new menu item is a constant $2 and the only fixed cost is for advertising. Each company knows that if it spends $12 million on advertising, it will get 2 million consumers to try its new...
6. There are 2 firms in an oligopoly market: firm ABC and firm XYZ. They simultaneously decide whether to spend on advertising. If both firms spend on advertising, the profit of each will be $80. If both firms do not spend on advertising, the profit of each will be $100. If only one firm spends on advertising, the firm with advertising carns $150 and the firm without advertising carns $30. (a) Complete the payoff matrix below. Advertising Advertising ABC: XYZ:...
8. -1 0. An advertising agency has developed Internet and television ads for a particular usiness. Each Internet ad costs $200 per run and each television ad costs $500 per run. The business does not want the su m of Internet and television ads to be run to exceed 51 times. The agency estimates that each viewing of the Internet ad will reach 1000 people and each airing of the television ad will reach 1500 people. If the total amount...
Q4. There are two firms A and B in a homogenous product industry. Inverse demand is P = 120 Q where Q is the combined output of the firms. Firm A has a marginal cost of 0 and firm B has a marginal cost of 10. There is an infinite sequence of periods in which firms simultaneously set prices. In this question we will consider whether the following collusive strategies with trigger strategy punish- ments are a subgame perfect Nash...
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...
LLALJU 13. 13. 10.00 points Firm 1 and firm 2 are car producers. Each has the option of producing either a big car or a small car. The payoffs to each of the four possible combinations of choices are as given in the following payoff matrix. Each firm must make its choice without knowing what the other has chosen. Big car Firm 2 Big car 400 for firmn 1 400 for firmn 2 700 for firm 1 600 for firm...
Please help with question d
PART II: GAME THEORY A few months ago, Samsung revealed their new smartphone whose screen folds and unfolds according to the user's preferences. This addition seems so promising and profitable that Apple is planning to enter the market for foldable smartphones as well and is deciding on its production scale. Naturally, Samsung is ready to respond and should decide which pricing structure is the most convenient: setting a high price"accommodate) or starting a price war....
only two firms in the industry of eanera , A long time ago, Kodak and Fuji the identical cos t structure were thinking of advertising their product at an exhausting rate, a mild not advertising at all. Assume that currently they share a profit of $54 million each S60 million and by a mild rate $45 reaches $105 if both advertise By advertising at an exhausting rate results in a cost of million for each firm. On the other hand...
Consider the problem facing two firms in the fast-food restaurant market, Firm A and Firm B. Each company has just come up with an idea for a new fast-food menu item, which it would sell for $6. Assume that the marginal cost for each new menu item is a constant $2 and the only fixed cost is for advertising. Each company knows that if it spends $12 million on advertising, it will get 2 million consumers to try its new...
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