ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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Static Game:
Dynamic Game:
US
USA/Fiji
No-Tax
Tax
Tax
No Tax
Tax
(10000, -99989) (10100,-89990)
(9900,-9989)
(10000,10)
Fiji
Fiji
No-Tax
Tax
No Tax
Tax
No Tax
10,000,10
9900,-9989
10,100,-89,990
Sub-game_1
10,000,-99,989
Sub-game_2
Sub-game_3
1. What is the subgame perfect Nash equilibrium of the dynamic game? How does it
differ from the equilibrium of the static game?
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Transcribed Image Text:Static Game: Dynamic Game: US USA/Fiji No-Tax Tax Tax No Tax Tax (10000, -99989) (10100,-89990) (9900,-9989) (10000,10) Fiji Fiji No-Tax Tax No Tax Tax No Tax 10,000,10 9900,-9989 10,100,-89,990 Sub-game_1 10,000,-99,989 Sub-game_2 Sub-game_3 1. What is the subgame perfect Nash equilibrium of the dynamic game? How does it differ from the equilibrium of the static game?
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