Consider two firms 1 and 2 engaging into the following one-shot game: if firm 1 advertises...
Consider two firms 1 and 2 engaging into the following one-shot game: if firm 1 advertises and firm 2 does not, firm 1 will make $20 million in profits and firm 2 will make $6 million. If firm 2 advertises and firm 1 does not, firm 1 will make $2 million and firm 2 will make $6 million. If firm 1 advertises and firm 2 advertises, each firm earns $10 million. If neither firm advertises, firm 2 will make $8 million and firm 1 will make $4 million.
(a) Write the payoff matrix for the above game.
(b) Does firm 1 have a dominant strategy?
(c) Does firm 2 have a dominant strategy?
(d) What is the Nash equilibrium for this one-shot game?
Explain your answers.
Homework Answers
Solutions in the below pic are given in the order - a,c,b and d.
If you have any doubt feel free to ask
Don't forget to thumbs up if it helped you.
Add Answer to:
Consider two firms 1 and 2 engaging
into the following one-shot game: if firm 1 advertises...
Consider the following information for a simultaneous move game: If you advertise and your rival advertises,...
Consider the following information for a simultaneous move game: If you advertise and your rival advertises, you each will earn $5 million in profits. If neither of you advertises, you will each earn $10 million in profits. However, if one of you advertises and the other does not, the firm that advertises will earn $15 million and the non-advertising firm will earn $1 million. a. Draw a payoff matrix for this problem b. What is the nash equilibrium? Explain. c....
2. Suppos e there are two firms in an oligopoly, Firm A both firms charge a...
2. Suppos e there are two firms in an oligopoly, Firm A both firms charge a low price, each earns and Firm B. If $2 million in profit. If both firms charge a high price, each earns $3 million in profit. If one firm charges a high price and one charges a low price, customers flock to the firm with the low price, and that firm earns $4 million in profit while the firm with the high price earns $1...
Use the following payoff matrix for a simultaneous move one shot game to answer the following...
Use the following payoff matrix for a simultaneous move one shot game to answer the following questions Player 2 Strategy C D E F player 1 A 6, 14 7, 11 18, 20 10, 19 B 12, 5 15, 1 7, 25 16, 17 Does player 1 have a dominant strategy? If yes, what is it? If no, why not? Does player 2 have a dominant strategy? If yes, what is it? If no, why not? Does this game have...
2. (5 points) Use the following payoff matrix for a simultaneous move one shot game to...
2. (5 points) Use the following payoff matrix for a simultaneous move one shot game to answer the following questions Player 2 Strategy С D E F Player 1 A 6, 14 7, 11 18, 20 10, 19 B 12, 5 15, 7, 25 16, 17 1 Does player 1 have a dominant strategy? If yes, what is it? If no, why not? Does player 2 have a dominant strategy? If yes, what is it? If no, why not? Does...
2. (5 points) Use the following payoff matrix for a simultaneous move one shot game to...
2. (5 points) Use the following payoff matrix for a simultaneous move one shot game to answer the following questions Player 2 Strategy с D E F Player 1 A 6, 14 7, 11 18, 20 10, 19 B 12, 5 15, 7, 25 16, 17 (a) (b) (C) Does player 1 have a dominant strategy? If yes, what is it? If no, why not? Does player 2 have a dominant strategy? If yes, what is it? If no, why...
Check my work In a two-player, one-shot simultaneous-move game each player can choose strategy A or...
Check my work In a two-player, one-shot simultaneous-move game each player can choose strategy A or strategy B. If both players choose strategy A, each earns a choose strategy B, each earns a payoff of $200. If player 1 chooses strategy A and player 2 chooses strategy B, then player 1 earns $100 and player 2 earns $600. If player 1 chooses strategy Band player 2 chooses strategy A, then player 1 earns $600 and player 2 earns $100. payoff...
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...
Use the payoff matrix to answer the following questions. Firm K Strategy A B Firm J...
Use the payoff matrix to answer the following questions. Firm K Strategy A B Firm J X 8, 8 18, -4 Y -4, 18 10, 10 (2 points) Does Firm J have a dominant strategy? If so, what is it? (2 points) Identify all of the Nash equilibrium positions. If there is no Nash equilibrium, indicate “None.” (2 points) Assume this is a one-shot, simultaneous game. Where will the game end? If the end game cannot be predicted indicate “No...
Consider the car industry, in which Ford and GM are the two dominant firms. (To keep...
Consider the car industry, in which Ford and GM are the two dominant firms. (To keep the analysis simple, just forget about all the others.) The market size is $9 billion. Each firm can choose whether to advertise. Advertising costs $1 billion for each firm that chooses it. If one firm advertises and the other doesn't, then the former captures the whole market. If both firms advertise, they split the market 50:50 and pay for the advertising. If neither advertises,...
Question 2 8 pts Use the payoff matrix to answer the following questions Firm Strategy А...
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...
2. Suppos e there are two firms in an oligopoly, Firm A both firms charge a low price, each earns and Firm B. If $2 million in profit. If both firms charge a high price, each earns $3 million in profit. If one firm charges a high price and one charges a low price, customers flock to the firm with the low price, and that firm earns $4 million in profit while the firm with the high price earns $1...
2. (5 points) Use the following payoff matrix for a simultaneous move one shot game to answer the following questions Player 2 Strategy С D E F Player 1 A 6, 14 7, 11 18, 20 10, 19 B 12, 5 15, 7, 25 16, 17 1 Does player 1 have a dominant strategy? If yes, what is it? If no, why not? Does player 2 have a dominant strategy? If yes, what is it? If no, why not? Does...
2. (5 points) Use the following payoff matrix for a simultaneous move one shot game to answer the following questions Player 2 Strategy с D E F Player 1 A 6, 14 7, 11 18, 20 10, 19 B 12, 5 15, 7, 25 16, 17 (a) (b) (C) Does player 1 have a dominant strategy? If yes, what is it? If no, why not? Does player 2 have a dominant strategy? If yes, what is it? If no, why...
Check my work In a two-player, one-shot simultaneous-move game each player can choose strategy A or strategy B. If both players choose strategy A, each earns a choose strategy B, each earns a payoff of $200. If player 1 chooses strategy A and player 2 chooses strategy B, then player 1 earns $100 and player 2 earns $600. If player 1 chooses strategy Band player 2 chooses strategy A, then player 1 earns $600 and player 2 earns $100. payoff...
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...
Most questions answered within 3 hours.
-
If
the more comprehensive data is available in MEPS, why does the NHIS
still exist? How...
asked 19 minutes ago -
Koo argues that the Japanese economy in the 1990s suffered from
a balance sheet recession. What...
asked 12 minutes ago -
Automobile mechanics conduct diagnosis tests on 150 new cars of
particular make and model to determine...
asked 6 minutes ago -
11) Find the proceeds of a 5 year non-interest
bearing note for $6500 discounted 2.5 years...
asked 13 minutes ago -
Required: Prepare the consolidated financial statements of
Griffin Ltd at 30 June 2019.
Griffin Ltd is...
asked 22 minutes ago -
1.How large must the coefficient of static friction be between
the tires and the road if...
asked 37 minutes ago -
What is the time complexity (Big-O) of the following code?
class Main
{
// Recursive...
asked 37 minutes ago -
Economists look at any situation in terms of its component
parts: the people making decisions, the...
asked 42 minutes ago -
What is a population?
Select one:
a. All of the individual organisms belonging to the same...
asked 47 minutes ago -
You have a yeast cell culture with a concentration of 5x10^4
cells/ml. If you dilute this...
asked 51 minutes ago -
In which direction the Reaction goes? Show detailed process.
SeO3 + 2ClO2. + 2H3O <---> Se...
asked 1 hour ago -
Unexposed silver halides are removed from photographic film when
they react with sodium thiosulfate
(Na2S2O3, called...
asked 1 hour ago