Is there a Nash Equilibrium for this game? If so, what is it?O The Nash Equilibrium is for both first to choose the high price.O The Nash Equilibrium is for both first to choose the low price.O The Nash Equilibrium is for Chevron to choose the high price while Shell chooses the low price.O The Nash Equilibrium is for Shell to choose the high price while Chevron chooses the low price.O There is no Nash Equilibrium for this game. A small town has only two gas stations, Chevron and Shell. Daily, each station mustsimultaneously display their prices, choosing between a high price and low price. Assumeboth firms know their potential payoffs and this is a one-time game (both firms are onlyinterested in today's profit). The payoff matrix for this game, showing potential dailyprofit, is displayed below.Chevron DecisionsHigh PriceLow PriceS: $5,000C: $5,500S: $1,000C: $8,000High PriceShell DecisionsS: $7,500C: $1,500S: $3,000C: $2,800Low Price

To check the Nash equilibrium: Both Shell & Chevron have dominant strategies choosing the low…

Is there a Nash Equilibrium for this game? If so, what is it? The Nash Equilibrium is for both first to choose the high price. O The Nash Equilibrium is for both first to choose the low price. The Nash Equilibrium is for Chevron to choose the high price while Shell chooses the low price. O The Nash Equilibrium is for Shell to choose the high price while Chevron chooses the low price. O There is no Nash Equilibrium for this game.

Is there a Nash Equilibrium for this game? If so, what is it? The Nash Equilibrium is for both first to choose the high price. O The Nash Equilibrium is for both first to choose the low price. The Nash Equilibrium is for Chevron to choose the high price while Shell chooses the low price. O The Nash Equilibrium is for Shell to choose the high price while Chevron chooses the low price. O There is no Nash Equilibrium for this game.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Little Kona is a small coffee company that is considering 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 True True or False: Only Little Kona has a dominant strategy in this game. False Big Brew High Price Low Price Enter $2 million, $3 million $2 million, $1 million Don't Enter 50, 58 million $0, $3 million Which of the following outcomes represent a Nash equilibrium in this case? Check all that apply. Big Brew maintains a high price and Little Kona does not enter. Big Brew maintains a low price and Little Kona does not enter. Big Brew maintains a high price and Little Kona enters. Big Brew maintains a low price and Little Kona enters. Big Brew threatens Little Kona by saying, "If you enter, we're going to set a low price, so you had better stay out." Thin True or False: Little Kona should believe the threat.
Which of the following is the best definition for a Nash Equilbirium? * Neither player has an incentive to switch his or her strategy even if the other perso switches his or her play O The same as a Prisoner's Dilemma O Something you will choose no matter what the other person chooses The idea that no matter what people will be selfish in order to sabotage his or her opponent.
Which of the following statements about Nash Equilibria in a two-player one-shot simultaneous game is FALSE? O If one player has a dominant strategy, a Nash Equilibrium is guaranteed. O If both players have a dominant strategy, a Nash Equilibrium is guaranteed. O A Nash Equilibrium is conditional on at least one player having a dominant strategy. O It is possible for a game in pure strategies to not have a Nash Equilibrium. It is possible for a two-person game to have more than two Nash Equilibria.
Consider the following game: A High price Low price High price Low price High price Low price Firm A O b. Firm A: high price, Firm B: high price O C. Firm A: low price, Firm B: high price O d. Firm A: high price, Firm B: low price $100 $130 $180 $150 Firm B $100 $50 $80 $120 The matrix above represents the decisions and payoffs to Firm A and Firm B. What is the solution to this game or what is the most likely outcome of this game? a. Firm A: low price, Firm B: low price
Consider the payoff matrix at right. O A. The pair of strategies high output -high output is the only Nash equilibrium. OB. The pair of strategies high output -high output and high output - low output are the only Nash equilibria. OC. The pair of strategies low output - low output and low output -high output are the only Nash equilibrium. O D. The pair of strategies low output-low output is the only Nash equilibrium. O E. The pair of strategies high output -high output and low output - low output are the only Nash equilibria. Firm A Firm B High Output Low Output High Outpu $20 $20 $28 $6 Low Output $6) $28 ($24 $24
Which of the following accurately describes a player's strictly dominant strategy? O It is a strategy that is better than all the player's other strategies, no matter what the other players do. There is always at least one player who has one in every game.. O It is the strategy a player uses in the Nash equilibrium of a game. Since a Nash equilibrium always exists, players always have a strictly dominant strategy. O It is a strategy that is better than all the player's other strategies, no matter what the other players do. A player may or may not have one. O It is a strategy that is better than all the player's other strategies, no matter what the other players do. Every player has a dominant strategy in every game.. O It is the strategy a player uses in the Nash equilibrium of a game. Since a Nash equilibrium may not exist, players may not always have a strictly dominant strategy.
Mark and Bevis play a static game. Mark chooses x and Bevis chooses y. Mark's payoff is 16 - (x- y)2, and Bevis' payoff is 16 - (x-0.5)2 - (y-0.5)2. Then O a. both Mark and Bevis have dominant strategies O b. Mark has a dominant strategy, but Bevis does not O c. Bevis has a dominant strategy, but Mark does not O d. neither Mark or Bevis have dominant strategies
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
Enter The payoffs are represented in the game tree illustrated in the figure to the right What is the subgame perfect Nash equilibrium? -(450,125 Rival Small O A. The game does not have a Nash equililbrium. O B. The Nash equilibrium is for the incumbent produce the large quantity and for the rival to only enter if the (900,0) Don't enter incumbent produces the small quantity. Incumbent Enter OC. The Nash equilibrium is for the incumbent to produce the large quantity and for the rival to not enter regardless of the incumbent's quantity. (400, -2 Large Rival O D. The Nash equilibrium is for the incumbent produce the small quantity and for the rival to only enter if the incumbent produces the small quantity. (800,0) Don't enter O E. The Nash equilibrium is for the incumbent to produce the large quantity and for the rival to enter regardless of the incumbent's quantity.
A Nash equilibrium occurs when O no player has an incentive to unilaterally change strategies. each player has an incentive to unilaterally change strategies. O both players can cooperate to increase their payoffs. O no player can earn a higher payoff from any other strategy.
Which of the following statements is true? O If a strategy is weakly dominant, then it is also strictly dominant. O None of the other answers is correct. O Games with strictly dominant strategies guarantee that players achieve the highest available payoffs in Nash Equilibrium. OIf a two-player game has a strictly dominant strategy for one player, then it does not necessarily have a strictly dominant strategy for the other player. O The prisoners' dilemma game has no strictly dominant strategy.
Part 1 Consider the following game between two early settlers in the United States: Settler 2 Move West Move North Move West 60, 110 100, 140 Settler 1 90, 100 Move North 70, 130 Which of the following is true? Choose one: O A. Both settlers have the same dominant strategy: move west. O B. Neither settler has a dominant strategy. O C.Only settler 1 has a dominant strategy. O D. Both settlers have the same dominant strategy: move north. O E. Only settler 2 has a dominant strategy. Part 2 Considering the payoff matrixin the game above, Choose one: O A there are two equilibria, when one moves west the other moves north (and vice versa). O B. there are no equilibria. O C there is one equilibrium, for both to move north. O D. there is one equilibrium, for both to move west.