Above is the payoff matrix for company A and company B as they choose thek advertising strategies. The payoffs of company A are indicated with color red, for company B in O Both players have a dominant strategy of Advertise O Nother player has a dominant strategy O For company A dominant strategy is Advertise, Company B does not have a dominant strategy O For company B, dominant strategy is Advertise, Company A does not have a dominant strategy

Refer to the following payoff table: Firm A's Advertising Budget Multiple Choice Low O Medium High Firm A High Firm A High A Firm B Medium D G Low $900, $900 $1,000 $800 Firm B's Advertising Budget Medium B E H $820, $1,220 $950, $1,025 $875, $920 $800, $875 After the first round of elimination, are there any dominant strategies? If so, which one(s)? C Neither firm has a dominant strategy after the first round. F High $1,060, $1,100 $1,040, $1,000 $1,025, $1,175

in this game table, Pepsi's payout is on the left and Sam's Choice's is on the ight. Is the Nash equilibrium a prisoner's dilemma? Pepsi High Low Sam's Choice High 110, 20 60, 10 Low 80, 40 70, 30 O No, it is not because both firms played their dominant strategies. O Yes, it is because the combined payoff for the two firms is lower than another outcome. O Yes, it is because at least one of the firms ends up with the lowest possible payoff. O No, it is not because at least one firm has achieved its highest possible payoff.

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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.

Anashequilibriumisastrategyprofilesuchthat: a)Both players are playing a best response strategy b)Both players must be playing a dominant strategyc)Both players achieve their highest possible payoff d)a) and c) e)b) and c)

1. Consider the following game matrix. Player A Answer: Top Bottom Left a, b e, f Player B Right c, d g, h (a) If top and left are strictly dominant strategies, then what do we know the relationship of the parameters? (b) If (top, left) is a Nash equilibrium, then what do we know the relationship of the parameters? Answer: (c) If top and left are strictly dominant strategies, will (top, left) be a Nash equilibrium? Why? Answer: (d) If (top, left) is a Nash equilibrium, must the strategies be strictly dominant strategies? Why? Answer:

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Hal and Nick are racing to develop a new brand of coconut milk that they both believe will be the next big soft drink. The payoff matrix shows the economic profit in millions of dollars for the game that Hal and Nick play. O A. Hal and Nick will never cooperate in this research. OB. Hal and Nick will cooperate in this research every time they play the game. Q Search OC. It is possible for cooperation in this research and development game if the game is played repeatedly and cheating on the agreement is punished using a tit-for-tat strategy OD. Hal and Nick will cooperate in this research only if a threat exists that a third firm will enter the coconut milk market Pat's strategies (blue squares) Develop Not develop 0 Hal's strategies (red squares) Develop -1.0 2.5 2.5 1.0 Not develop Next -1.0 1.0

Show how the concept of focal points can lead us towards unique outcomes in games where multiple Nash equilibria exist. Please you tables and multiples examples, clearly explaing what the focal point find is in each example.