Exam 13: Game Theory

Consider the following game: a.Does either player have a dominant strategy? Explain. b.Use the process of iterated elimination of dominated strategies to reduce the possible outcomes for the game. c.Find all pure Nash Equilibrium(s).

If neither firm has a dominant strategy,a Nash equilibrium cannot exist.

-The above figure shows the payoff matrix facing an incumbent firm and a potential entrant.The potential entrant cannot earn a profit if the incumbent

-The above figure shows the payoff matrix facing an incumbent firm.Assuming a fixed cost of entry,will the incumbent deter entry? Why?

-The above figure shows the payoff to two airlines,A and B,of serving a particular route.If the two airlines must decide simultaneously,which one of the following statements is TRUE?

An incumbent's threat to retaliate after a potential competitor enters the market will be taken seriously by potential competitors if

In a two-player simultaneous game,if player A has a dominant strategy and player B does not,player B will

An auction in which the price announced by the auctioneer DESCENDS is called a(n)

Two identical firms are considering entering a new market that currently has no suppliers.The demand is large enough for both firms to make a positive profit.There are no fixed costs to enter.Explain how a simultaneous decision to enter on the part of the two firms will lead to a different outcome than a sequential entry decision.

-The above figure shows the payoff matrix for two firms,A and B,choosing to produce a basic computer or an advanced computer.The mixed-strategy Nash equilibrium is

In a simultaneous game where both players prefer doing the opposite of what the opponent does,a Nash equilibrium does not exist.

-The above figure shows the payoff matrix for two firms,A and B,choosing to produce a basic computer or an advanced computer.The joint profits

-The above figure shows the payoff to two gasoline stations,A and B,deciding to operate in an isolated town.If firm A chooses its strategy first,then

For an oligopolistic firm,which of the following can be identified as a strategy?

-The above figure shows the payoff to two gasoline stations,A and B,deciding to operate in an isolated town.Suppose a $30 fee is required to enter the market.If firm A chooses its strategy first,then

A mixed strategy may

A single-period duopoly firm can choose output level A or B.The firm decides it will produce level A regardless of what the other firm produces.This decision may occur because

With regard to preventing entry,if identical firms act simultaneously,

-The above figure shows the payoff matrix for two firms,A and B,selecting an advertising budget.The firms must choose between a high advertising budget and a low advertising budget.A Nash equilibrium

A private auction is an auction in which