Exam 10: Game Theory: Inside Oligopoly

Firm B is the incumbent facing potential entry from its rival; Firm A.Firm A's strategies consist of {Entry, Stay Out}.Firm B's strategies are then {hard if entry; hard if stay out; soft if entry; soft if stay out}.Find the non-subgame Nash equilibrium to this game, if one exists.

Based on your knowledge of one-shot and repeated games, would you expect tipping behavior to differ depending on whether a person is eating in a hometown diner or in a restaurant located in Timbuktu? Explain.

Which of the following is true?

If you advertise and your rival advertises, you each will earn $4 million in profits.If neither of you advertise, you will each earn $10 million in profits.However, if one of you advertises and the other does not, the firm that advertises will earn $1 million and the non advertising firm will earn $5 million.If you and your rival plan to hand your business down to your children (and this "bequest" goes on forever) then a Nash equilibrium is for each firm to

Which of the following enhances the ability of waste companies to collude?

Which of the following is true?

When a worker announces that he plans to quit, say next month, the "threat" of being fired has no bite.The worker may find it in his interest to shirk.What can the manager do to overcome this problem?

If you advertise and your rival advertises, you each will earn $4 million in profits.If neither of you advertise, you will each earn $10 million in profits.However, if one of you advertises and the other does not, the firm that advertises will earn $1 million and the non advertising firm will earn $5 million. Which of the following is true?

Based on the following game, what are the secure strategies for Player One and Player Two?

Suppose that management and the union are bargaining over how much of a $500 surplus to give to the union.It is assumed that the surplus can only be split into $250 increments.Furthermore, negotiations are set up such that management and the union must simultaneously and independently write down the amount of surplus to allocate to the union.The payoff structure to this one-shot bargaining game is listed in the above payoff matrix.Find the Nash equilibrium(ia) to this game.

Which of the following conditions correctly describes a Nash equilibrium when two firms are in the market?

If this one-shot game is repeated 100 times, the Nash-equilibrium payoffs of the players will be ________________ each period.

The dominant strategy of Player 1 is:

If you advertise and your rival advertises, you each will earn $5 million in profits.If neither of you advertise, you will each earn $10 million in profits.However, if one of you advertises and the other does not, the firm that advertises will earn $15 million and the non advertising firm will earn $1 million.Which of the following is true?

Which of the following is a correct statement?

Which of the following is a valid critique of the use of game theory in economics?

If you and your rival plan to hand your business down to your children, and this "bequest" goes on forever, then a Nash equilibrium when the interest rate is zero is for

If you advertise and your rival advertises, you each will earn $4 million in profits.If neither of you advertise, you will each earn $10 million in profits.However, if one of you advertises and the other does not, the firm that advertises will earn $1 million and the non advertising firm will earn $5 million.If you and your rival plan to be in business for 10 years, then the Nash equilibrium is

If you advertise and your rival advertises, you each will earn $5 million in profits.If neither of you advertise, you will each earn $10 million in profits.However, if one of you advertises and the other does not, the firm that advertises will earn $15 million and the non advertising firm will earn $1 million.Suppose this game is repeated for a finite number of times, but the players do not know the exact date at which the game will end.The players can earn collusive profits as a Nash equilibrium to the repeated play of the game if the probability the game terminates in any period is

You are the manager of the ABC novelty store, and your only competitor is the XYZ novelty store.You are both trying to decide on which magic tricks and party favors to carry in stock.The product mixes available to both of you are low, medium, and high in variety.Your expected earnings in this market are shown in the following table.