Economics: Principles, Problems, & Policies (McGraw-Hill Series in Economics) - Standalone book
20th Edition
ISBN: 9780078021756
Author: McConnell, Campbell R.; Brue, Stanley L.; Flynn Dr., Sean Masaki
Publisher: McGraw-Hill Education
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Chapter 13.A, Problem 1ADQ
To determine
Zero-sum game and the positive-sum game.
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Students have asked these similar questions
Wal-Mart's dominant strategy is to pick a price of $.
Target
Price = $30
Price = $17
%3D
What is the Nash equilibrium for this game?
$6,000
$1,500
O A. The Nash equilibrium is for Target to choose a price of $17 and Wal-Mart to choose
a price of $30.
Price = $30
$6,000
$11,000
O B. The Nash equilibrium is for Target and Wal-Mart to both choose a price of $30.
Wal - Mart
C. The Nash equilibrium is for Target to choose a price of $30 and Wal-Mart to choose
a price of $17.
$11,000
$4,500
Price = $17
%3D
$1,500
$4,500
O D. The Nash equilibrium is for Target and Wal-Mart to both choose a price of $17.
South
OE.
O E. A Nash equilibrium does not exist for this game.
18. Answer the next question based on the payoff matrix for a two-firm oligopoly where the
numbers represent the firms' respective profits given each of their pricing strategies:
FIRM Y
O $ 800,000
O $1,000,000
O $1,450,000
Strategies:
High-price
If both firms collude to maximize joint profits,
O $1,250,000
FIRM X
High-price
X = $625,000
Y = $625,000
Low-price X = $275,000
Y = $725,000
Low Price
X = $725,000
Y = $275,000
X = $400,000
Y = $400,000
tal profits for the two firms will be:
5. The following represents the payoffs in a one period game in prices HI and LO.
A
HI
LOW
B
HI
(100, 100)
(200,0)
LOW
(0, 200)
(50, 50)
(a) If A and B were playing this game only once, what strategy should A choose, and why?
(b) A and B are playing the same game an infinite number of times and each has a discount rate
of 50% (.50). Firm B adopts a trigger strategy and selects HI in the first round. What would be
A's present value of profits from cooperation (HI)? What would be its present value from
cheating (LO)? Would A choose to cooperate or cheat?
Chapter 13 Solutions
Economics: Principles, Problems, & Policies (McGraw-Hill Series in Economics) - Standalone book
Ch. 13.1 - Prob. 1QQCh. 13.1 - Prob. 2QQCh. 13.1 - Prob. 3QQCh. 13.1 - Prob. 4QQCh. 13.4 - Prob. 1QQCh. 13.4 - The D2e segment of the demand curve D2eD1 graph...Ch. 13.4 - Prob. 3QQCh. 13.4 - Prob. 4QQCh. 13.A - Prob. 1ADQCh. 13.A - Prob. 2ADQ
Ch. 13.A - Prob. 3ADQCh. 13.A - Prob. 4ADQCh. 13.A - Prob. 1ARQCh. 13.A - Prob. 2ARQCh. 13.A - Prob. 3ARQCh. 13.A - Prob. 1APCh. 13.A - Prob. 2APCh. 13 - Prob. 1DQCh. 13 - Prob. 2DQCh. 13 - Prob. 3DQCh. 13 - Prob. 4DQCh. 13 - Prob. 5DQCh. 13 - Prob. 6DQCh. 13 - Prob. 7DQCh. 13 - Prob. 8DQCh. 13 - Prob. 9DQCh. 13 - Prob. 10DQCh. 13 - Prob. 11DQCh. 13 - Prob. 12DQCh. 13 - Prob. 13DQCh. 13 - Prob. 1RQCh. 13 - Prob. 2RQCh. 13 - Prob. 3RQCh. 13 - Prob. 4RQCh. 13 - Prob. 5RQCh. 13 - Prob. 6RQCh. 13 - Prob. 7RQCh. 13 - Prob. 8RQCh. 13 - Prob. 1PCh. 13 - Prob. 2PCh. 13 - Prob. 3P
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