Suppose the Department of Health decides to finally start enforcement. Any dispensary found not to be testing in a given period must pay $1,000 and each dispensary has a 20% chance of getting caught for not testing. There are no PR benefits to testing. This yields the payoff matrix:
a) Are there any Nash Equilibria?
b) Are the strategies interdependent?
c) Is there a dominant strategy?
d) Could the dispensaries do better if they could collude?
Suppose the Department of Health decides to finally start enforcement. Any dispensary found not to be testing in a given...
Suppose that the Department of Health continues to not enforce testing requirements, but patients start to discriminate against producers that do not test their products, i.e., there are PR benefits from testing equal to $200, but a dispensary only benefits if the other dispensary does not test. Again, testing costs $100. Using the single-period game payoff matrix below, determine how Dispensary 1 and Dispensary 2 will behave. a) Are there any Nash Equilibria? b) Are the strategies interdependent? c) Is...
Medical cannabis dispensaries in New Mexico are required to test all batches of product prior to sale. However, enforcement does not exist. Use the single-period game below to determine whether a medical cannabis dispensary will test or not. Testing costs $100. a) Are there any Nash Equilibria? b) Are the strategies interdependent? c) Is there a dominant strategy? d) Could the dispensaries do better if they could collude? Dispensary 2 Test -100,-100 | 0, -100 Don't Test -100, 0 Dispensary...