Microeconomics (12th Edition) (Pearson Series in Economics)
12th Edition
ISBN: 9780133872293
Author: Michael Parkin
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
Chapter 15.2, Problem 3RQ
To determine
Identify the role of collusive agreement to restrict output, raise price and create a game like the prisoners’ dilemma.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
What is the prisoners dilemma, and what does it have to do with oligopoly?
Why is collusion more likely in a repeated game? Explain using one example.
What is a tit for tat strategy? Why might it be a rational strategy in and infinitely repeated prisoner’s dilemma?
Chapter 15 Solutions
Microeconomics (12th Edition) (Pearson Series in Economics)
Ch. 15.1 - Prob. 1RQCh. 15.1 - Prob. 2RQCh. 15.1 - Prob. 3RQCh. 15.1 - Prob. 4RQCh. 15.2 - Prob. 1RQCh. 15.2 - Prob. 2RQCh. 15.2 - Prob. 3RQCh. 15.2 - Prob. 4RQCh. 15.2 - Prob. 5RQCh. 15.2 - Prob. 6RQ
Ch. 15.3 - Prob. 1RQCh. 15.3 - Prob. 2RQCh. 15.4 - Prob. 1RQCh. 15.4 - Prob. 2RQCh. 15.4 - Prob. 3RQCh. 15.4 - Prob. 4RQCh. 15.4 - Prob. 5RQCh. 15 - Prob. 1SPACh. 15 - Prob. 2SPACh. 15 - Prob. 3SPACh. 15 - Prob. 4SPACh. 15 - Prob. 5SPACh. 15 - Prob. 6SPACh. 15 - Prob. 7SPACh. 15 - Prob. 8SPACh. 15 - Prob. 9APACh. 15 - Prob. 10APACh. 15 - Prob. 11APACh. 15 - Prob. 12APACh. 15 - Prob. 13APACh. 15 - Prob. 14APACh. 15 - Prob. 15APACh. 15 - Prob. 16APACh. 15 - Prob. 17APACh. 15 - Prob. 18APACh. 15 - Prob. 19APACh. 15 - Prob. 20APACh. 15 - Prob. 21APACh. 15 - Prob. 22APACh. 15 - Prob. 23APA
Knowledge Booster
Similar questions
- If a group of sellers could form a cartel, what quantity and price would they try to set? What is the prisoner's dilemma, and what does it have to do with oligopoly?arrow_forwardCarefully define 'collusion' and use a Game theory model to show why it may occur.arrow_forwardWhy would a firm in oligopoly market structure find game theory a useful tool to employ when making decisions?arrow_forward
- While game theory predicts non-cooperative behavior for a one-shot Prisoner's dilemma. By repeating the game, say 20 rounds, it becomes possible to adopt more complex strategies that allow cooperative play as a Nash Equilibrium in at least some rounds of the game. True Falsearrow_forwardIf a market structure is an oligopoly, do Lexus, Cadillac, and Lincoln engage in sticky pricing? Who is the market leader?arrow_forwardWhich 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.arrow_forward
- Modeling a cartel as a prisoners’ dilemma game shows that ____________________ may be rational even if ____________________. non-cooperation; cooperation benefits everyone cooperation; cooperation benefits everyone cooperation; cooperation damages everyone non-cooperation; cooperation damages everyonearrow_forwardThe attached diagram depicts two firms controlled by Jacob and Elsa, and two potential actions each firm might take. Payoffs from action combinations appear in the normal-form depiction of the game played by Jacob and Elsa. What is the Nash equilibrium of the game (Jacob's strategy listed first)? a b Jacob's Actions d Dont' Advertise Advertise, Advertise Advertise Don't Advertise J=300 J=400 Don't advertise, Don't advertise Elsa's Actions Don't advertise (Jacob), Advertise (Elsa) с Advertise (Jacob), Don't Advertise (Elsa) E=200 Selected answer will be automatically saved. For keyboard navigation, press up/down arrow keys to select an answer. E=50 Advertise J=100 J=200 E=300 E=100arrow_forwardConsider the following dynamic game: Find the subgame perfect Nash Equilibrium Identify the non-credible threat equilibriumarrow_forward
- Under which of the following game theory circumstances is a collusive outcome most likely? Prisoner's dilemma Repeated games Games with dominant-strategy outcomes Games with Nash equilibriumarrow_forwardUsing your own words, explain how the concept of elimination of dominated strategies differs from the concept of Nash equilibrium.arrow_forwardThe following table shows two firms in a single-stage duopoly game. Each firm makes its decision without knowledge of the other firm's decision. The payoffs for each firm represent economic profits, and each firm strictly prefers more economic profit than less. This game would be considered a prisoner's dilemma if X is between Tempurpedic Produce 3,000 mattresses $25,000 Produce 4,000 mattresses $35,000 Produce 3,000 $25,000 $10,000 mattresses Sealy $10,000 $35,000 Produce 4,000 mattresses $10,000 and $25,000. d. $35,000 and $70,000. a. b. $25,000 and $35,000. $10,000 and $35,000. е. $45,000 and $70,000. c.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Exploring EconomicsEconomicsISBN:9781544336329Author:Robert L. SextonPublisher:SAGE Publications, IncEconomics (MindTap Course List)EconomicsISBN:9781337617383Author:Roger A. ArnoldPublisher:Cengage Learning
Exploring Economics
Economics
ISBN:9781544336329
Author:Robert L. Sexton
Publisher:SAGE Publications, Inc
Economics (MindTap Course List)
Economics
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Cengage Learning