2. Find the Nash equilibrium of the game below: Low Price Medium Price High Price Firm B a. Low Price 4,4 6,3 8,2 Firm A Medium Price High Price 3,6 5,5 4,3 2,8 3,4 3,3
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- 3. Determine the Nash Equilibrium for the following normal form of the game. A) MARY B) UP DOWN PLAYER 1 HARLEY UP (10, 10) (4,8) LEFT (3,0) UP MIDDLE (1, 1) DOWN (0,1) DOWN (8,4) (5,5) PLAYER 2 CENTER RIGHT (2,1) (1,1) (4,2) (0,0) (5,0) (0,1)3. Nash Equilibria Consider the following (normal-form) game. Compute a Nash Equilibrium of this game. U C D L | M R 5,0 1,3 4,0 2,4 1,4 3,5 0,1 1,0 5,0What is the Nash Equilibrium of the following game? |0, 0 Up Down 3, 2 |2, 1 3, 1 2, 6 4, 2 5,5 10, 0 a. (Down, D) b. (Down, C) c. (Up, A) d. (Up, B)
- Aedri Quick Lesson in Game Theory A Nash Equilibrium is an outcome in which neither player is better off by changing their strategy. 2.7 Is a Dominant Strategy equilibrium also a Nash equilibrium? a) Yes b) No esc The Ice Cream Guys $3.99 $4.99 + Chucky's Chunky CCT: $20,000 $3.99 ICG: $20,000 CCT: $60,000 ICG: $10,000 tab Treats CCT: $10,000 $4.99 ICG: $60,000 CCT: $40,000 ICG: $40,000 The table above is the payoff matrix for the annual profit of the only two ice-cream-truck firms operating in Beach City. They are deciding the price of an ice cream cone. %3D caps lo 2.8 What is Chucky's dominant strategy? a) $3.99 b) $4.99 c) Not enough information hift 2.9 What is the dominant strategy equilibrium in this situation? a) Both charge $3.99 b) Both charge $4.99 c) CCT charges $3.99 and ICG charges $4.99 d) CCT charges $4.99 and ICG charges $3.99 2.10 Suppose these two firms engaged in collusion (which, of course, totally doesn't happen because it is against the law). Which outcome would…1. Find all subgame perfect nash equilibrium 2. Find a nash equilibrium that is not SPNE, and explain why it is not an SPNE.6. Consider the simultaneous move pricing game below. Which of the following statements is true concerning this game? a. The game has a dominant strategy (DSSC) solution b. The game has an iterated dominance (IESDS) solution c. The game has more than 1 Nash equilibrium d. None of the above statements are true Firm A Firm B H M L H 30,30 38,12 33,0 M 11,34 18,14 23,1 L 2,24 6,17 14,8
- Consider the following sequential game: 1 O D,L U.L U,R U D,R D (0,2) 2 L What is the subgame perfect Nash equilibrium of this game? R. (-1,-1) (1,1)b 500,0 -10, 30 B 6,-1 0,0 C -1, 20 -20, 100 What is the Nash Equilibrium of this game? A a a. (C, c) O b. (C, b) O c. (A, a) O d. (B, b) C 20, 12 8, -2 7,8004. Boeing and Airbus, change in profits ($m) from the development of a super jumbo jet.AirbusDevelop Do not developBoeing Develop -50, -50 -30, 80Do not develop 80, -30 0, 0a) Identify the key assumption of Game theoryb) What important lesson does game theory reveal about coordination inan oligopoly market?c) In the game above, what is the Nash equilibrium?
- Quick Lesson in Game Theory A Nash Equilibrium is an outcome in which neither player is better off by changing their strategy. 2.7 Is a Dominant Strategy equilibrium also a Nash equilibrium? a) Yes b) No The Ice Cream Guys $3.99 $4.99 Chucky's Chunky CCT: $20,000 $3.99 ICG: $20,000 CCT: $60,000 ICG: $10,000 CCT: $10,000 $4.99 ICG: $60,000 CCT: $40,000 ICG: $40,000 Treats The table above is the payoff matrix for the annual profit of the only two ice-cream-truck firms operating in Beach City. They are deciding the price of an ice cream cone. 2.8 What is Chucky's dominant strategy? a) $3.99 b) $4.99 c) Not enough information 2.9 What is the dominant strategy equilibrium in this situation? a) Both charge $3.99 b) Both charge $4.99 c) CCT charges $3.99 and ICG charges $4.99 d) CCT charges $4.99 and ICG charges $3.99 2.10 Suppose these two firms engaged in collusion (which, of course, totally doesn't happen because it is against the law). Which outcome would they agree upon, if any? a) Both…H7. Find all pure strategy Nash equilibria and for each one, state whether or not it is subgame perfect.4. Correlated EquilibriaConstruct an example (not one from class or the reading) of a Normal form game with a correlated equilibrium that is not a Nash equilibrium.