Assume that you are in a oligopolistic market where there are two strong firms such as Turkcell and Vodafone, Turkish GSM providers Please design a game between these two providers. Please discuss If there is a Nash Equilibrium in your game.
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Q3) Assume that you are in a oligopolistic market where there are two strong firms such as Turkcell and Vodafone, Turkish GSM providers Please design a game between these two providers. Please discuss If there is a Nash Equilibrium in your game.
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- Answer the following questions: 1.What is the Nash Equilibrium of this game? 2. Does Starbucks have dominant pricing strategy, given these predicted payoffs? Does Dunkin' Donuts have a dominant pricing strategy, given these payoffs? Explain. 3. Is this game an example of a prisoner's dilemma? Why or why not?7. Solving for dominant strategies and the Nash equilibrium Suppose Felix and Janet are playing a game in which both must simultaneously choose the action Left or Right. The payoff matrix that follows shows the payoff each person will earn as a function of both of their choices. For example, the lower-right cell shows that if Felix chooses Right and Janet chooses Right, Felix will receive a payoff of 7 and Janet will receive a payoff of 4. Felix Left Right Left 6,3 3,3 Janet Right 6,4 7,4 The only dominant strategy in this game is for to choose The outcome reflecting the unique Nash equilibrium in this game is as follows: Felix chooses and Janet choosesThe “research and development” game is best analyzed as a simultaneous move game, because the parties lack information about each other’s investment decisions. Which game (in the attachment) describes the “research and development game” properly? Remember that investment costs $6, and that this should be reflected, whenever appropriate, in the correct game matrix. (Note: Firm A chooses the row and Firm B chooses the column.)
- Two firms are competing to establish one of two new wireless communication standards, A or B. A strategy is a choice of standard, and an outcome of this game is a choice of standard by each firm – for example, (A, B) represents the case where Firm 1 decides to develop standard A and Firm 2 develops standard B. Here, the first letter will always correspond to Firm 1’s decision, and the second letter to Firm 2’s decision. Firm 1 has the following preferences over outcomes, in order of highest to lowest preferred: it prefers (A, A) to (B, A) to (A, B) to (B, B). Firm 2 prefers (A, B) to (A, A) to (B, A) to (B, B). Suppose that firms simultaneously decide which standard to develop. What is the pure strategy Nash equilibrium? Is the answer (B,B)? If not please explian what is the answer?3. The following is an interpretation of the rivalry between the United States (USA) and the Soviet Ünion (USSR) during the cold war. Each side has the choice of two strategies: Aggressive and Restrained. The payoff table is given as follows: USSR Restrained Aggressiveness Restrained 4,3 1,4 USA Aggressiveness 3,1 2,2 a) Consider this game when the two countries move simultaneously. Find all pure strategy Nash equilibria. b) Next consider three alternative ways in which the game could be played with sequential moves: (i) The USA moves first and the USSR moves second. (i) the USSR moves first and the USA moves second. (i) The USSR moves first, and the USA moves second, but the USSR has a further move after the USA moves. For each case, draw the game tree and find the subgame-perfect Nash equilibrium. c) What are the key strategic issues (commitment, credibility and so on) for the two countries. (Note: Be concise. Your answer should not exceed 300 words].Find the Nash equilibrium strategy and payoff in this simultaneous game. Show your work. Firms can collude (C) or not collude (NC) and their profits in millions are as follows. Please see attached.
- A and B are competitors in the mobile phone industry. Both A and B have to decide whether to participate or not to participate in a Phone for the Future Trade Fair next month. The matrix payoff below shows the profits (USD million) corresponding to their actions. a) What is the Nash equilibrium of the above game? b) Is the Nash equilibrium Pareto Optima? Explain. c) Suppose B is pessimistic of A's rationality, what is B's strategy? Compare and comment on B's strategy in (a) and (c). A Participate Do not participate B Participate Do not participate 400,1000 200,200 500,500 1000,400Game Theory. Consider the following scenario: Two cloth manufacturing companies, A and B. Firm A designs a few costumes, and they are confident enough that they will be sold quickly in the market, but after launching their designs, they make very little profit due to a lack of capital to promote their designs. Now firm B uses these designs and makes a significant profit due to its brand value. 1. Demonstrate that the situation IS a game (explain strategic interaction/conflict).6)Game Theory: The Prisoners’ Dilemma: Assume that the Wilson and Spalding athletic equipment companies are in a one-shot game for market share and profits, but that they have the option of choosing only one of two possible price strategies for basketballs: $20 or $80. Obviously if they choose different strategies, the firm with the lower price will win the entire market. The firms face the following payoff matrix (See Chap. 10). Wilson\ \Spalding Wilson $ 20 Price Wilson $ 80 Price Spalding $ 20 Price $ 400, $ 400 $ 1500, $ 0 Spalding $ 80 Price $ 0, $ 1500 $ 1000, $ 1000 What strategy will each firm choose? Why? Which strategy is dominant? Which strategy is preferred by each firm? What will be the outcome of the one-shot game? Where is the Nash equilibrium? Which outcome would be best for the two firms? What will happen if the game is repeated an infinite number of times?
- Consider the following information for a static game. If you advertise and your rival advertises, you each will earn $5 million in profits. If you choose not to advertise and your rival chooses not to advertise, you will each earn $10 million in profits. However, if one of you advertises and the other does not, the firm that advertises will earn $15 million and the firm that does not advertise will earn $1 million. Assuming that each player cares only about his or her own profits, the Nash equilibrium is? Explain your answer in three long paragraphs (intro body and conclusion)Imagine that there are two snowboard manufacturers (FatSki and WideBoard) in the market. Each firm can either produce ten or twenty snowboards per day. The table below (see attached) shows the profit per snowboard for each firm that will result given the joint production decisions of these two firms. Draw the game payoff matrix for this situation. Does either player have a dominant strategy? If so, what is it? What is the Nash equilibrium solution and how many boards should each player produce each day? Since FatSki and WideBoard must play this game repeatedly (i.e. make production decisions every day), what strategy would you advise them to play in order to maximize their payoff over the long term?aepioymentld=598281800483229979995799&elSBN=9780357133606&id%3D1061548135&snapshotld%32200166& 6. Using a payoff matrix to determine the equilibrium outcome Suppose there are only two firms that sell smartphones: Flashfone and Pictech. The following payoff matrix shows the profit (in millions of dollars) each company will earn, depending on whether it sets a high or low price for its phones. Pictech Pricing High Low High 11, 11 2, 15 Flashfone Pricing Low 15, 2 8, 8 For example, the lower-left cell shows that if Flashfone prices low and Pictech prices high, Flashfone will earn a profit of $15 million, and Pictech will earn a profit of $2 million. Assume this is a simultaneous game and that Flashfone and Pictech are both profit-maximizing firms. If Flashfone prices high, Pictech will make more profit if it chooses a price, and if Flashfone prices low, Pictech will make more profit if it chooses ▼ price. a If Pictech prices high, Flashfone will make more profit if it chooses a price, and…
