What is the Nash Equilibrium in a game? A. A situation where all players cooperate for maximum gain B. A situation where no player can improve their outcome by changing their strategy unilaterally C. A situation where players always choose the same strategy D. A situation where players randomly select strategies

What is the Nash Equilibrium in a game? A. A situation where all players cooperate for maximum gain B. A situation where no player can improve their outcome by changing their strategy unilaterally C. A situation where players always choose the same strategy D. A situation where players randomly select strategies

Microeconomics: Principles & Policy

14th Edition

ISBN:9781337794992

Author:William J. Baumol, Alan S. Blinder, John L. Solow

Publisher:William J. Baumol, Alan S. Blinder, John L. Solow

Chapter13: Between Competition And Monopoly

Section: Chapter Questions

Problem 3TY

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Answer all the questions, show all the working. Consider the following game in normal form. Not cooperate Cooperate Not cooperate 20,20 50,0 Cooperate 0,50 40,40 What is Nash equilibrium? Is it efficient? Why? What needs to be complied with so that the players would like to cooperate? What happens when one of the players does not cooperate? Why? Define trigger strategy. Calculate the discount factor (δ) that would make both players decide to cooperate.
Sam and Sarah are thinking about getting married. However if either of them cheats on the other, they would get a payoff of 10, while the other person gets zero. If neither cheat, they stay with each other and get a payoff of 7 each and if both cheat, the relationship falls apart and each get a payoff of 1. What is the Nash equilibrium of this game? a. Cheat, Cheat b. Not cheat, Not cheat Sam cheats, Sarah doesn't Sarah cheats, Sam doesn't
Use the following one-shot, normal-form game to answer the following questions a. Find each player’s dominant strategy, if it exists. b. Find each player’s secure strategy. c. Find the Nash equilibrium.
Use the following extensive-form game to answer the following questions. a. List the feasible strategies for player 1 and player 2. b. Identify the Nash equilibria to this game. c. Find the subgame perfect equilibrium.
Using game theory what are some examples in where Nash equilibrium is incorporated?
9. Little Kona is a small coffee company that is consider- ing entering a market dominated by Big Brew. Each company's profit depends on whether Little Kona enters and whether Big Brew sets a high price or a low price: Little Kona Enter Don't Enter High Price Kona makes $2 million Kona makes zero Big Brew Brew makes $3 million Brew makes $7 million Kona loses $1 million Low Price Kona makes zero Brew makes $1 million Brew makes $2 million
Use the following normal-form game to answer the following questions. a. For what values of x is strategy D (strictly) dominant for player 2? b. For what values of x is strategy B (strictly) dominant for player 1? c. For what values of x is (B, D) the only Nash equilibrium of the game?
Give an example of a strategic game in which at the Nash equilibrium players play lotteries. Define the game and explain the logic that leads to the equilibrium choices.
Tucker and Eddie are playing the following game. Tucker can choose A or B and Eddie can choose C or D. The first payoff is for Tucker, the second for Eddie. Eddie Tucker C D A 3, 2 4, 3 B 4, 5 3, 4 Identify the Nash equilibrium(s) in this game. What rational game theoretic advice would you offer Tucker and Eddie on how to play this game? If Tucker and Eddie follow your advice, what payoff should each expect? Show your work.
QUESTION 14 Which of the following is the Nash equilibrium of the game in the picture? Du Q = 30 Q = 40 Q = 30 du's profit = 900 Etisalat du's profit = 1000 Etisalat's profit = 900 Etisalat's profit = $750 Q = 40 Etisalat's profit = 1000 du's profit = 750 a. Du chooses 30, Etisalat chooses 40. b. Du chooses 30, Etisalat chooses 30. C. Du chooses 40, Etisalat chooses 40. d. Du chooses 40, Etisalat chooses 30. du's profit = 800 Etisalat's profit = 800
9. In the game played in the class, "Guess 2/3 of the average", assume there are 3 students, each guesses a number between 0 and 100 (including 0 and 100) simultaneously. The winner will be the one whose number is closest to 2/3 of the average. Which of the following is a Nash Equilibrium for this game? A. Everyone guesses "0" B. Everyone guesses "100" C. One student guesses "0", one guesses "100" and one guesses "50" D. One student guesses "0", one guesses "0" and one guesses "100" E. None of the above
Use the following normal-form game to answer the questions below. Player 1 (B.C) (B.D) (A.C) (A.D) Strategy A B a. Identify the one shot Nash equilibrium. 60, 60 30, 130 Yes Player Z D 130, 30 80, b. Suppose the players know this game will be repeated exactly three times, Can they achieve payoffs that are b shot Nash equilibrium?