Economics:
10th Edition
ISBN: 9781285859460
Author: BOYES, William
Publisher: Cengage Learning
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Question
Chapter 26, Problem 15E
To determine
To explain:
The difference between dominant strategy and Nash equilibrium.
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What is the difference, if any, between a dominant strategy and a Nash equilibrium? Give examples.
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- Explain the meaning of a Nash Equilibrium. How does it differ from and equilibrium in dominant strategies?arrow_forwardWhat is meant by dominant strategy?arrow_forwardImagine a small town with three car repair shops competing for a limited number of customers. Explain why the three shops working together to keep their prices high is unlikely to be a Nash equilibrium.arrow_forward
- What is the difference between Dominant strategy and mixed strategy? Please explainarrow_forwardFor the game below, find any Nash equilibrium. Show your work and report any Nash equilibrium strategies.arrow_forwardFill in the chart attached and answer the following questions: a) Bert's dominant strategy is to: (pick the correct answer below ) - no dominant strategy - fish for 20 hours per week -fish for 40 hours per week. b) Ernie's dominant strategy is to: ( pick the correct answer below) - no dominant strategy - fish for 20 hours per week -fish for 40 hours per week. c) Is there a Nash Equilibrium? ( pick the correct answer below) - No - Yes, both fish for 20 hours per week - Yes, one fisher for 40 and the other for 20. - Yes both fish for 30 hours per week. d) Is there an incentive for Bert and Ernie to collude? Why or why not?arrow_forward
- Find Nash equilibrium using cell by cell inspectionarrow_forwardUse the strictly dominant strategy to find a Pure Strategy Nash Equilibrium if there is one.arrow_forwardFind any Nash equilibria in the game below. Firm B Co-operate Don’t co-operate Firm A Co-operate 60 60 0 80 Don’t co-operate 80 0 10 10 Answer a. There is one Nash equilibrium: both firms don't co-operate. b. There are no Nash equilibria. c. There are two Nash equilibria: one firm co-operates and the other firm doesn't co-operate. d. There are two Nash equilibria: (i) both firms co-operate and (ii) both firms don't co-operate.arrow_forward
- why is a nash equilibrium stablearrow_forwardFind any Nash equilibria in the game below. Firm B Co-operate Don’t co-operate Firm A Co-operate 60 60 0 80 Don’t co-operate 80 0 10 10 a. There is one Nash equilibrium: both firms don't co-operate. b. There are no Nash equilibria. c. There are two Nash equilibria: one firm co-operates and the other firm doesn't co-operate. d. There are two Nash equilibria: (i) both firms co-operate and (ii) both firms don't co-operate.arrow_forwardTwo firms operating in the same market must decide between charging a high price or a low price. The Payoffs are as below. Firm A's profit is listed before the comma, B's profit after the comma. Firm B Firm A Low Price High Price Low Price 16, 17 7, 28 High Price 28, 7 22, 22 If each firm tries to choose a price that is optimal, regardless of the other firm's price, what is the Nash equilibrium? Does either firm have a dominant strategy?arrow_forward
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