Imagine United Airlines deciding independently to reduce fares on its flights. Other competing airlines quickly matched the fare cuts. These actions might be interpreted as:

Explain the concept of Nash Equilibrium in case of Non-Cooperative Games.

Consider the following hypothetical case. Only BMW and a competitor, Mazda, are  considering launching a new, niche HPC in the Asian market. The issue is what price to  charge. Both new cars are very similar in performance and production cost. Analyse the  interaction between the two firms using game theory. Present a payoff matrix to model the  situation and analyse it for Nash equilibrium. What can either of these firms do to make  their best, most-preferred outcome more likely?

Problem 5.1. The inverse market demand for printer paper is given by P = 400 – 2Q. There are two firms who compete to produce this paper, each with a marginal cost of production equal to c = 40 over a large range of output (ie, assume constant marginal cost). The two firms compete in quantities, in other words they each simultaneously choose a quantity to produce (Cournot competition). Derive the Cournot-Nash equilibrium of this game. Please write final answers in the boxes, showing work in blank areas. (a) The reaction function for each firm. 91 (92): 92 (91) (b) Optimal output q for each firm. 92 = р = = π1 = (c) Market price (from demand curve). (d) Firm profits. 92 = π2 =

This is a Microeconomics Problem. Explain clearly in words how the above game has no dominant strategy equilibrium.

where is the nash equilibrium? find out the dominant strategy. it was discovered that two domestic manufacturing companies were fixing prices. if each company is silent, there is no penalty, but production and business are disrupted due to continuous investigation by the Fair Trade Commission. The penalty for revealing the estimated loss due to the investigation and collusion is as follows:                                            Firm 2                             Silence                 Disclosure      Silence            -200, -200            -590, 0      Firm 1 Disclosure            0, -590                  -450, -450            fine( a hundred million won)

There are two competing firms, Jack and Jill represents a normal form of a game of two firms that produce a widget that is identical in quality. The rows in the table below correspond to the two different strategies available to firm Jack: price High or Low. The columns correspond to the same strategies for Jill: price High or price Low. The numbers in the tables show the profits.  The number on the left (first number) is Jack firm profit, and the numbers on the right (second number) is Jill’s firm profit in millions of dollars. For example, If both price High (the upper left cell), then they each get 10 million in profits. If a firm prices high, the other firm prices low, consumers will have a choice to go to the low firm and the firm that prices high will get zero while the firm that prices low will get all market share.  The game is played simultaneously, meaning same time and neither will know what the decision is.…

Two firms are playing an infinitely-repeated prisoner's dilemma pricing game of the following form:     Firm 1                                                    Firm 2   Low price High Price Low price 4, 4 20, 0 High price 0, 20 12,12   Consider the decision to cheat ONLY  ONCE for a firm in this game against the opponent that is a Tit-for-Tat player. Cheating firm gets an extra in payoffs for the first round, but has to face $0 payoffs for the second round in order to be able to bring the opponent to the collusive outcome again in the third round. What is the minimum rate of return (r) that would make defecting only once? Show your calculations.

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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?