Consider the payoff matrix at right.O A. The pair of strategies high output -high output is the onlyNash equilibrium.OB. The pair of strategies high output -high output and highoutput - low output are the only Nash equilibria.OC. The pair of strategies low output - low output and lowoutput -high output are the only Nash equilibrium.O D. The pair of strategies low output-low output is the onlyNash equilibrium.O E. The pair of strategies high output -high output and lowoutput - low output are the only Nash equilibria.Firm AFirm BHigh Output Low OutputHigh Outpu $20 $20 $28 $6Low Output $6) $28 ($24 $24

Imagine you and a friend run two companies, let's call them A and B. You both have two choices:…

Answered: Consider the payoff matrix at right. O…

Principles of Economics (MindTap Course List)

8th Edition

ISBN:9781305585126

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter17: Oligopoly

Section: Chapter Questions

Problem 5CQQ

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Two competing firms are each planning to introduce a new product. Each will decide whether to produce Product A, Product B, or Product C. They will make their choices at the same time. The resulting payoffs are shown to the right. Are there any Nash equilibria in pure strategies? If so, then what are they? O A. The Nash equilibria are for both firms to introduce Product B and for both firms to introduce Product A. O B. The Nash equilibria are for Firm 1 to introduce Product B and Firm 2 to introduce Product C and for Firm 1 to introduce Product C and Firm 2 to introduce Product B. O C. The Nash equilibria are for Firm 1 to introduce Product A and Firm 2 to introduce Product B and for Firm 1 to introduce Product B and Firm 2 to introduce Product A. O D. The Nash equilibria are for Firm 1 to introduce Product A and Firm 2 to introduce Product C and for Firm 1 to introduce Product C and Firm 2 to introduce Product A. There are no Nash equilibria. O E. If both firms use maximin strategies,…
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.
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.
Consider the payoff matrix for a game depicted below. Player 1 selects the row and Player 2 selects the column. Up Down Left 0,-1 2,3 Right 1,2 0,1 What is (are) the Nash equilibrium (equilibria)? Select one or more: □ a. Player 1 plays right; Player 2 plays up O b. Player 1 plays up; Player 2 plays right Oc. Player 1 plays up; Player 2 plays left O d. Player 1 plays left; Player 2 plays up Oe. Player 1 plays left; Player 2 plays down Of. Player 1 plays down; Player 2 plays right Og. Player 1 plays right; Player 2 plays down Oh. Player 1 plays down; Player 2 plays left
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
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 is false? O A set of strategies constitute a Nash equilibrium if, given the strategies of the other players, no player can improve her payoff by unilaterally changing her own strategy. Nash equilibrium is a strategy that always results in the maximum possible payoff at least for one player. Dominant strategy is a strategy that results in the highest payoff to a player regardless of the other player's action. O Astrategy is a complete plan for playing the game, for any one of the players.
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.
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.
The payoff matrix below describes a one-shot game in which two farmers ("Player A" and "Player B") choose between planting corn or planting wheat. The payoffs in this matrix represent thousands of dollars of income, so more is better. Pla yer A Plant Corn Plant Wheat What kind of equilibrium is this? Plant Corn Dominant Strategy Equilibrium Nash equilibrium 3, 3 Player B 5,0 Both a Nash and a Dominant Strategy Equilibrium O No equilibrium Plant Wheat 0,5 1, 1
Why is a solution that we find through backward induction always a subgame perfect Nash equilibrium? O The results of backward induction are the only possible Nash equilibria. O The backward induction solution maximizes the combined payoffs of all players. O At each decision node, backward induction chooses the best option going forward for the player who moves at that point. O When we use backward induction, we only consider dominant strategies. Show your steps please.

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