Exam 13: Game Theory and Competitive Strategy

Consider the following game that represents the payoffs from different advertising campaigns (low,medium,and high spending)for two political candidates that are running for a particular office.The values in the payoff matrix represent the share of the popular vote earned by each candidate: Under the version of the game with simultaneous moves,what is the Nash equilibrium?

Scenario 13.15 Consider the pricing game below: -What is true about threats in the game in Scenario 13.15?

The countries Economus and Sociolomous on planet Subjectus are engaged in a Cold War.The pay-offs of their available strategies are presented in the table below. The pay-offs are listed in terms of percentage growth in the standard of living of the two countries. Does either country have a dominant strategy? Does the game have a Nash equilibrium? What is the maximin strategy of each player in the game?

Two firms in a local market compete in the manufacture of cyberwidgets.Each firm must decide if they will offer a warranty or not.The pay-offs of each firm's strategy is a function of their competitor as well.The pay-off matrix is presented below. Does either player have a dominant strategy? Does the game have any Nash equilibria? What is the maximin strategy of each player in the game? Should the players use a mixed strategy?

Scenario 13.12 Consider the game below: -If the Battle of the Sexes game were played sequentially,

Scenario 13.3 Consider the following game: -Which of the following is true for the game in Scenario 13.3?

Scenario 13.4 Consider the following game: -Which of the following is TRUE for the game in Scenario 13.4?

Scenario 13.15 Consider the pricing game below: -If Boring were able to move first in a sequential version of the game in Scenario 13.15,the equilibrium would be

Scenario 13.4 Consider the following game: -In the game in Scenario 13.4,the equilibrium outcome:

Scenario 13.14 Consider the game below: -What is true of equilibrium in the game in Scenario 13.14?

Mitchell Electronics produces a home video game that has become very popular with children.Mitchell's managers have reason to believe that Wright Televideo Company is considering entering the market with a competing product.Mitchell must decide whether to set a high price to accommodate entry or a low,entry-deterring price.The payoff matrix below shows the profit outcome for each company under the alternative price and entry strategies.Mitchell's profit is entered before the comma,and Wright's is after the comma. a.Does Mitchell have a dominant strategy? Explain. b.Does Wright have a dominant strategy? Explain. c.Mitchell's managers have vaguely suggested a willingness to lower price in order to deter entry.Is this threat credible in light of the payoff matrix above? d.If the threat is not credible,what changes in the payoff matrix would be necessary to make the threat credible? What business strategies could Mitchell use to alter the payoff matrix so that the threat is credible?

Two firms in a local market compete in the manufacture of cyberwidgets.Each firm must decide if they will engage in product research to innovate their version of the cyberwidget.The pay-offs of each firm's strategy is a function of the strategy of their competitor as well.The pay-off matrix is presented below. Firm #2 chooses to innovate with probability 20/21.If Firm #1 does the same,what is the expected pay-off? Is this a Mixed Strategy Nash Equilibrium? Suppose,instead,that firm #2 innovates with probability 2/3.Should player #1 always innovate?

A situation in which a bidder over-values an auction item and is worse off because their bid is too high is known as the:

It can be rational to play tit-for-tat in a repeated Prisoners' Dilemma game

Which is true of output-choice models of oligopoly behavior?

Once the state environmental protection agency devises its new policy to protect the environment,firms decide whether to remain in the state or move their operations to a neighboring state.In the language of game theory,this is an example of:

When cost and demand are stable over time in an industry,repetition of Prisoners' Dilemma situations

Scenario 13.17 Consider the entry-deterrence game below.The potential entrant would have to spend some amount in sunk costs to enter the market. -Refer to Scenario 13.17.If the Incumbent Monopoly installed excess capacity in advance of the Potential Entrant's appearance on the scene,and this excess capacity had a cost of $X,it would reduce by $X the Incumbent Monopoly's payoffs in the

Which of the following conditions,if present,is sufficient to make a game cooperative?

In a two person bargaining situation it is