K- Two firms must simultaneously decide whether to enter a market. The payoffs resulting from their decisions are illustrated in the figure to the right Determine the mixed-strategy Nash equilibrium for this game. The mixed strategy Nash equilibrum is for Firm 1 to not enter with probability 6, and for Firm 2 to not enter with probability (Enter your responses rounded to two decimal places) Don't enter Firm 2 Enter Don't enter O Enter ⓇPP

K- Two firms must simultaneously decide whether to enter a market. The payoffs resulting from their decisions are illustrated in the figure to the right Determine the mixed-strategy Nash equilibrium for this game. The mixed strategy Nash equilibrum is for Firm 1 to not enter with probability 6, and for Firm 2 to not enter with probability (Enter your responses rounded to two decimal places) Don't enter Firm 2 Enter Don't enter O Enter ⓇPP

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter8: Game Theory

Section: Chapter Questions

Problem 8.1P

See similar textbooks

Similar questions

Solve for the Nash equilibrium (or equilibria) in each of the following games. (a) The following two-by-two game is a little harder to solve since firm 2’spreferred strategy depends of what firm 1 does. But firm 1 has a dominantstrategy so this game has one Nash equilibrium. Firm 2 Launch Don’tFirm 1 Launch 60, -10 100, 0 Don’t 80, 30 120, 0 What is the Nash equilibrium of this simultaneous-move game? (b) What would the outcome of this game be if instead firm 1 moved first and then, after seeing what firm 1 chose, firm 2 chose it strategy? In this case firm 1 doesn’t necessarily need to choose a best response, but firm 2 must choose a best response since it moves second.
◄ Search 12:47 PM Sun Nov 12 ← Note Nov 12, 2023 Uptown's price strategy The Nash equilibrium occurs when High Low LED RareAir's price strategy High $12 $15 The more favorable outcome would be for $12 Tt ✪ $6 B Low $6 D $8. $15 $8 S O both firms have an incentive to deviate from this strategy given the strategy of the competing firm. It is shown by the dominant strategy of cell A. 92% neither firm has an incentive to deviate from this strategy given the strategy of the competing firm. It is shown by the dominant strategy of cell D. O one firm consistently has an incentive to deviate from this strategy given the strategy of the competing firm. It is shown by the high-price strategy of cell B. O one firm consistently has an incentive to deviate from this strategy given the strategy of the competing firm. It is shown by the high-price strategy of cell C. O the firms to collude and use the high-price strategy but this strategy requires cooperation. O one firm to take the lead and let the…
Consider the following simultaneous game: Player 1 U D Player 2 L 30,10 -10, 20 R 10, 20 5,-10 Please indicate whether each of the following statements is true or false. Player 1 has a dominant strategy. This game has a Nash equilibrium. This game has a Nash equilibrium in pure strategies. Player 1's best response is D if player 2 plays R.
2. Provide the normal-form expression to the extensive-form game below, and find all pure-strategy Nash equilibria there. Find the subgame-perfect Nash equilibrium then. A B X E Y B A B F t G F G BF B D A 0 3. Find the subgame perfect Nash equilibria (may or may not be unique) in the game below. A B 100 30 F 60 9 5 B 3 5 12 10 60 10 80 10 180 60 200 40
Is this strategy a sub-game perfect Nash Equilibrium? Player 2: a c e Player 1: A DE C 2 True False A d B e a 2 1 2 1 A D E חח 0 0 1 F -1 1000
20) Given the payoff matrix in the figure, the Nash equilibrium outcome of this game is for: Ajinomoto Produce 30 Produce 40 million pounds million pounds Ajinomoto makes $180 million Ajinomoto makes $200 million Produce 30 million ADM makes $180 million ADM makes $150 million pounds Ajinomoto makes $150 million Ajinomoto makes $160 million Produce 40 million ADM makes $200 million ADM makes $160 million pounds O A. each firm to produce 30 million pounds. B. each firm to produce 40 million pounds. C. ADM to produce 30 million pounds and for Ajinomoto to produce 40 million pounds. D. ADM to produce 40 million pounds and for Ajinomoto to produce 30 million pounds. ADM
Amazon faces the other group (Other), which consists of e-book manufacturers other than Amazon, in a game in which the players choose a format (either Amazon's format, AZW, or the other group's format, EPUB), as the profit matrix shows. Other What are the pure-strategy Nash equilibria if the firms choose their formats simultaneously and are free to choose either format? Is there a mixed-strategy equilibrium? AZW EPUB Determine the pure-strategy Nash equilibria for this game. 3 -3 A. The Nash equilibria are for Amazon and the other group to select the same format. AZW O B. The Nash equilibrium is for Amazon and the other group to select the AZW format. O C. The Nash equilibrium is for Amazon and the other group to select the EPUB format. Amazon O D. This game has no Nash equilibria. -3 O E. The Nash equilibria are for Amazon and the other group to select different formats. EPUB Determine the mixed-strategy Nash equilibrium for this game. The mixed-strategy Nash equilibrium is for Amazon…
a) Draw an extensive form game with 4 outcomes (2 moves for player 1 followed by 2 moves for 2 after each of 1's moves) and no pure strategy Nash equilibrium. b) Write the strategic form to verify your answer to (a) c) Draw an extensive form 2-player game, in which both players always move, that has exactly 4 outcomes, 1 subgame perfect Nash equilibrium and no non-subgame perfect Nash equilibrium and no dominant strategies. d) Write the strategic form and use it to verify your answer to (b)
Please look at the payoff matrix below which shows the benefits that would accrue to each player in a 2-player.non-sequential, non-repeated game. a) Identify the collusive (cooperative) equilibrium. b) Identify the secure strategy (maximin) equilibrium c) Identify the maximax equilibrium d) Identify the Nash equilibrium Apple Inc. Strategy 1 Strategy 2 Strategy 3 20 40 60 60 1000 200 Strategy A 70 50 90 Banana Inc. 400 70 300 Strategy B 40 80 100 90 150 80 Strategy C
1\2 L 1,-1 | 5,0 | 0,0 0,5 4,4 0,0 0,0 3,3 M R C 0,0 В 1. Find all set of rationalizable strategies (Hint: We are allowed to eliminate a pure strategy, if it is strictly dominated by a mixed strategy). 2. Find all set of pure strategy Nash equilibria. 3. Is there a dominant strategy equilibrium for this game?
The following table contains the possible actions and payoffs of players 1 and 2. Player 1 U M D L 2,10 2,5 8,7 Player 2 C 5,2 11,8 8,4 R 5,4 2,9 8,3 This is a simultaneous move game. In a pure strategy Nash equilibrium of this game, Player 1 receives a payoff of ✓and player 2 receives a payoff of If, instead of playing simultaneously, player 2 moves first, then in the Nash equilibrium player 1 receives a payoff of ✓and player 2 receives a payoff of
Consider a sequential-move game in which an entrant is considering entering an industry in competition with an incumbent firm. If the entrant does not enter ("Out"), the incumbent firm earms a payoff of 10, while the entrant earns a payoff of 0. If the entrant enters ("In"), then the incumbent can either accommodate or fight. If the incumbent accommodates, both eamn a payoff of 5. If the incumbent fights, then the entrant can either leave the industry ("Withdraw") or remain in it ("Stay"). If the entrant stays, both earn a payoff of -5. If the entrant withdraws, the entrant earns a payoff of - 1, and the incumbent earms a payoff of 8. The extensive form of the game is depicted in the following figure, where the payoffs are of the form (Entrant Payoff, Incumbent Payoff). Entrant In Out Incumbent Accommodate Fight O Entrant (5,5) (0,10) Stay Withdraw (-5,-5) (-1,8)