3) Two firms, X and Y, are planning to market their new products. Each firm can developTV, Laptop. Market research indicates that the resulting profits to each firm for thealternative strategies are given by the following payoff matrix (25 Points):FIRM YTVLAPTOPPHONEFIRM XTV30, 3060 , 3520, 50LAPTOP40,7020, 2050,80PHONE50,2080,5010,10A) Find the Nash equilibria for this game, assuming that both firms make their decisionsat the same time. (explain the decision step by step) :B) If each firm is risk averse and uses a maximin strategy, what will be the resultingequilibrium? (explain the decision step by step) :C) What will be the equilibrium if Firm X makes its selection first? If Firm Y goes first?|

A subject which helps entities decide the moves which are the best for them is said to be game…

4) Find the Nash equilibria for this game, assuming that both firms make their decisions at the same time. (explain the decision step by step) : 3) If each firm is risk averse and uses a maximin strategy, what will be the resulting equilibrium? (explain the decision step by step) : C) What will be the equilibrium if Firm X makes its selection first? If Firm Y goes first?|

4) Find the Nash equilibria for this game, assuming that both firms make their decisions at the same time. (explain the decision step by step) : 3) If each firm is risk averse and uses a maximin strategy, what will be the resulting equilibrium? (explain the decision step by step) : C) What will be the equilibrium if Firm X makes its selection first? If Firm Y goes first?|

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter17: Oligopoly

Section: Chapter Questions

Problem 5PA

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Starbucks and Krispy Kreme are trying to decide whether or not to open a shop in the new Mall of Africa. They both prefer if the other firm opens a shop because they can draw bigger crowds but neither wants to be the only American-branded coffee shop in the Mall. The payoff matrix for this dilemma is below. Krispy Kreme Open Don't Open Starbucks Open (i) (ii) 5,5 2,6 Don't open (iii) (iii) 6,2 3,3 MCQ question 4 Find the Nash Equilibrium (Starbucks, Krispy Kreme) for the payoff matrix when the game is played simultaneously. A. (5:5) only. B. (6,2) only. C. (2,6) only. D. (3,3) only E. There is no stable Nash Equilibrium. MCQ question 5 Suppose that Starbucks goes first in choosing to open or not to open. What is the outcome for this game? A. (5:5) only. B. (6,2) only. C. (2,6) only. D. (3,3) only E. There is no stable Nash Equilibrium.
19) The soft-drink industry is dominated by Coca-Cola and Pepsi and each firm spends a lot of money on advertising. Suppose each firm is considering a costly television commercial during halftime of the Super Bowl. The table shows the payoff matrix of profits that each firm would receive from their advertising decision, given the advertising decision of their rival. Profits in each cell of the payoff matrix are given as (Coke, Pepsi). If each firm makes the decision to advertise on the Super Bowl independently, what is the Nash equilibrium of this game? Table: Coke and Pepsi Advertising Game Pepsi Super Bowl Ad No Super Bowl Ad Super Bowl Ad No Super Bowl Ad $800, $700 $1,500, $600 Coke $650, $900 $1,000, $800 O A. Both firms advertise during the Super Bowl. O B. Neither firm advertises during the Super Bowl. C. Pepsi advertises, but Coke does not advertise during the Super O Bowl. OD. Coke advertises, but Pepsi does not advertise during the Super Bowl.
Belge1 - Word eri Gözden Geçir Görünüm Yardım Ne yapmak istediğinizi söyleyin 1) Two firms, X and Y, are planning to market their new products. Each firm can develop TV, Laptop. Market research indicates that the resulting profits to each firm for the alternative strategies are given by the following payoff matrix ! FIRM Y TV LAPTOP PHONE FIRM X TV 30, 30 60. 35 20, 50 LAPTOP 40,70 20, 20 50,80 PHONE 50,20 80,50 10,10 A) Find the Nash equilibria for this game, assuming that both firms make their decisions at the same time. (explain the decision step by step); B) If each firm is risk averse and uses a maximin strategy, what will be the resulting equilibrium? (explain the decision step by step); C) What will be the equilibrium if Firm X makes its selection first? If Firm Y goes first?:
8. To advertise or not to advertise Suppose that Creamland and Dairy King are the only two firms that sell ice cream. The following payoff matrix shows the profit (in millions of dollars) each company will earn depending on whether or not it advertises: Creamland Dairy King Advertises Doesn't Advertise 9,9 Doesn't Advertise 3, 15 Advertises 15, 3 11, 11 For example, the upper-right cell shows that, if Creamland advertises and Dairy King doesn't advertise, Creamland will make a profit of $15 million, and Dairy King will make a profit of $3 million. Assume this is a simultaneous game and that Creamland and Dairy King are both profit-maximizing firms. If Creamland decides to advertise, it will earn a profit of $ not advertise. If Creamland decides not to advertise, it will earn a profit of $ does not advertise. million if Dairy King advertises and a profit of $ If Dairy King advertises, Creamland makes a higher profit if it chooses million if Dairy King advertises and a profit of $…
12. To advertise or not to advertise Suppose that two firms, Hatte Latte and Bean Bruuer, are the only sellers of espresso in some hypothetical market. The following payoff matrix gives the profit (in millions of dollars) earned by each company depending on whether or not it chooses to advertise: Bean Bruuer Advertise Doesn't Advertise Advertise Hatte Latte Doesn't Advertise 9,9 3,15 15,3 11, 11 For example, the lower left cell of the matrix shows that if Bean Bruuer advertises and Hatte Latte does not advertise, Bean Bruuer will make a profit of $15 million, and Hatte Latte will make a profit of $3 million. Assume this is a simultaneous game and that Hatte Latte and Bean Bruuer are both profit-maximizing firms. If Hatte Latte chooses to advertise, it will earn a profit of $ does not advertise. million if Bean Bruuer advertises and a profit of $ million if Bean Bruuer If Hatte Latte chooses not to advertise, it will earn a profit of $ does not advertise. million if Bean Bruuer…
Suppose that Fizzo and Pop Hop are the only two firms that sell orange soda. The following payoff matrix shows the profit (in millions of dollars) each company will earn depending on whether or not it advertises: Рop Hop Advertise Doesn't Advertise Advertise 8, 8 15, 2 Fizzo Doesn't Advertise 2, 15 11, 11 For example, the upper right cell shows that if Fizzo advertises and Pop Hop doesn't advertise, Fizzo will make a profit of $15 million, and Pop Hop will make a profit of $2 million. Assume this is a simultaneous game and that Fizzo and Pop Hop are both profit-maximizing firms. If Fizzo decides to advertise, it will earn a profit of $ million if Pop Hop advertises and a profit of $ million if Pop Hop does not advertise. If Fizzo decides not to advertise, it will earn a profit of $ million if Pop Hop advertises and a profit of $ million if Pop Hop does not advertise. If Pop Hop advertises, Fizzo makes a higher profit if it chooses If Pop Hop doesn't advertise, Fizzo makes a higher…
1. Consider the following game between TinMan (TM) and Scarecrow (SC). Each of the two players have two strategies at each node: North and South (uppercase N and S for Scarecrow; lowercase n and s for TinMan). N 4, 5 5, 4 S SC TM TM S n 1, 0 S SC TM SC 3, 2 2, 2 0, 1 N 2, 3 a. Find the subgame perfect Nash equilibrium of this game. b. Write the game in strategic form and find all the pure strategy Nash equilibria.
The payoff matrix below is for two firms, A and B, deciding the quantity of their output levels. What is the dominant strategy of each firm? icrosc Firm B Strategy High output Low output High output 100, 80 0, 125 Firm A Low output 65, 0 40, 65 Both firms produce low levels of output. DO cGill Both firms produce high levels of output. Temp Firm A's dominant strategy is to produce low levels of output, but Firm B does not have a dominant strategy. Order Article O Firm B's dominant strategy is to produce low levels of output, but Firm A does not have a dominant strategy. Neither firm has a dominant strategy. oy 00 halysis
3) Consider the following two extensive form games and answer the following questions. How many subgames present in the following games? Find all pure strategies SPNE. Find all pure strategies NE of these games. Game A Game B u (5,3) u (0,2) 2 2 L L (-5,4) d (0,0) 1 1 1 (1,-5) (-10,-10) u R (2,3) A M 2 R 2 r d 1 (8,1) B (2,0) (2,2)
. OPEC, the Organization of Petroleum Exporting Countries, was founded in 1969. Their original objective was to form a cartel to increase the price that they receive for their oil exports. Create a prisoner’s dilemma type game for two large members of OPEC (e.g. Saudi Arabia and Indonesia). Create numbers, where payoffs are total annual oil export revenues for each of these two countries. Verbally explain how you got your numbers. Find the Nash equilibrium. Based on this model, what strategy is in the oil exporters’ best interest (Nash or otherwise)? How do they make it happen? Create another prisoner’s dilemmamodel for all of OPEC on one side, and all non OPEC oil exporting nations on the other side. Create numbers, where payoffs are total annual oil export revenues for each of the two sides. Verbally explain how you created your numbers. Also create your numbers applying the fact that OPEC’s total production capacity is greater than total non OPEC exports…
3) Amazon and Target both sell the new Xbox, and have a choice whether to charge a high price or a low price. The payoff matrix identifies the profit either store can expect to make (in millions of dollars). Walmart High Price Low Price High Price b. Identify the Nash Equilibrium. 3,6 5,5 Amazon Low Price 2.8 4.3 a. Identify the Dominant Strategy for either player, or write "none" if there isn't one.
(f) Does GaterTools have a dominant strategy? Explain using numbers from the payoff matrix.(g) Identify the Nash equilibrium. Explain why this is a Nash equilibrium using information from the payoff matrix.(h) Suppose HandyBilt makes a credible commitment to GaterTools that if GaterTools maintains its price, then HandyBiltwill pay GaterTools $250. Will this offer result in a Nash equilibrium with different strategies from those identified in part(g) ? Explain using numbers from the payoff matrix.