Two firms are competing on price. If they have the same price, they share the market otherwise the one with the lowest price captures all demand Market demand follows Q(P)=100-3P Cost is C(Q)=10Q Firms can only choose between the following prices: 9, 10, 11, 12. In the Nash equilibrium of this game, what prices are charged? Suggestion: calculate the profits they obtain for each of the price combinations, write down the game in its normal form (payoff matrix), and then use the underlining method to match best responses. 9 12 ☐ 10 ☐ 11 14

Answer to image?

There are three players in this simultaneous move game. Player-3 chooses between game A and game B. Player-1 chooses between U, M and D. Player-2 chooses between L and R. The payoffs are given below: P-1 U M D A P-2 L R 5,5,0 1,4,0 6,4,5 2,5,3 3,1,2 3,3,1 Find all pure strategy N.E. of this game. P-1 U M D L 4,8,0 4,1,3 3,5,1 B P-2 R 2,1,0 3,3,3 0,3,0

2 firms are engaged in Cournot competition; firm A faces the cost curveCA(yA)=40yAand firm Bfaces the cost curveCB(yB)=40yB. The inverse market demand curve isP(y)=100y, whereyrepresents market level of output.   a)Define the Cournot game.   b)In 1 or 2 sentences explain why a firm has no incentive to deviate from the Cournot Nash equilibrium(holding their opponent’s strategy constant).        c)Find the Cournot Nash Equilibrium.      d)Now suppose instead of playing their strategies at the same time, firm A moves first and then firm B moves second(sequentialgame).Does firm A earn higher profits in this game or the game in part c)?