Answered: D E F G H A 3,3 0,2 1,0 1,0 1, x B 2,0…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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parameter x = 5 List all pure strategies for either player that are weakly dominated.
Consider a Stackelberg duopoly:There are two firms in an industry with demand Q = 1 − Pd.The “leader” chooses a quantity qL to produce. The “follower” observes qL and chooses a quantity qF.Suppose now that the cost function is Ci(qi) = qi2 for i = L, F. (a) Find the subgame perfect equilibrium. (b) Compare the equilibrium you found with the Nash equilibrium if the game was simultaneous (i.e., Cournot competition). Is the Nash equilibrium of the Cournot game also a Nash equilibrium of the sequential game? Why or why not?
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)
Consider a bankruptcy game with two risk neutral players where V =$800,000, C1= $300,000 and C2=$800,000. a) What is the Nash bargaining solution?
QUESTION 12 This is a HOT SPOT question. You will need to evaluate the picture of the game below, and answer the question by clicking on a specific area (the hot spot) of the picture. Question: Are there any dominant strategies in this game? If there are, click on the box that corresponds to that dominant strategy (either UP, DOWN, LEFT, or RIGHT). If there aren't any anywhere outside of these boxes. If there are dominant strategies for both players, clicking on only one of them will suffice. Player 1 Player 2 Selected Coordinates Clear UP DOWN LEFT 45, 80 70, 100 RIGHT 50, 150 60, 60
Find the subgames, convert them into Normal-Forms, find the Subgame Perfect Nash Equilibrium step-by-step.
Consider a Cournot competition game. The market demand function is: p = 4 – q1 – q2, where p is price and q is firm i's output level. Suppose that the firm's marginal cost of production is: C1 = 1, c2 = 0, respectively. A) Find the Nash equilibrium of the above game.
If a strategy profile is a Nash equilibrium, there is at least one player that could achieve higher payoffs by deviating.(a) True. (b) False.
Game Theory
Which of the following is true of a prisoneros dilemma game? It does not have an equilibrium. It has a dominant-strategy equilibrium. It does not have a Nash equilibrium. It ensures better payoffs to the players compared to other games.
Consider the Normal Form Game characterized in the following figure: P1\P2 X Y Z A B с (1,1) (0,0) (-1,0) (0,0) (2,2) (0,0) (0,-1) (0,0) (3,3) Which is the Strictly Dominated Strategy for player 1? O (1,0,0) O (0,1,0) O (0,0,1) There are no strictly dominated strategies for player 1
Which of the following concepts of equilibrium in game theory always exists under the assumption ofexpected utility maximization? (A) dominant strategy equilibrium; (B) iterated dominance equilibrium ; (C) Nash equilibrium in mixed strategies; (D) Nash equilibrium in pure strategies.

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D E F G H A 3,3 0,2 1,0 1,0 1, x B 2,0 2,2 0,0 0,1 7, y с 0,1 0,0 2,2 2,0 2, z