Identify a real-world situation in which you see game theory/strategic behavior in action. Explain the game: Who are the players ? What are the strategies they have at their disposal? How are payoffs determined? What, if any, is the Nash equilibrium? Note, this article from Up Journey might help you come up with an example: https://upjourney.com/game-theory-examples-in-real-life
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- What is game theory? How does it relate to strategic decision making? What do the phrases dominant strategy and Nash Equilibrium mean as they apply to game theory?Game Theory and Strategic Choices - End of Chapter Problem Your instructor challenges you to solve this classic economics thought experiment called the stag hunt: Suppose you and a hunting partner are hunting for food to feed your families in a post-apocalyptic world with no stores, farms, or trade. You lay a trap for a deer that will provide a large number of calories for your two families to continue to survive. While waiting, you both spot a hare running through the trap. If you chase after the hare, you'll catch it but you will scare any wildlife in the area and you won't catch the deer you were waiting for. The hare only provides a small amount of calories for your own family and none for your partner's family. Use the payoff matrix to answer the question. You hunt the deer You hunt the hare Your friend hunts the deer Your payoff is 5 Your friend's payoff is 5 Your payoff is 2 Your friend's payoff is A Your friend hunts the hare Your payoff is A Your friend's payoff is 2 Your…QUESTION 18 Imagine the following game: The players: Emirates Airlines and Etihad Airlines The choice: cut fares by 50% or leave fares alone If both airlines cut fares, Each airline's profit = 400 million If neither airline cuts fares, Each airline's profit = 600 million If only one airline cuts its fares, Its profit = 800 million The other airline's profits = 200 million How many million each company will make in the Nash equilibrium of the game?
- Answer all the questions, show all the working. Consider the following game in normal form. Not cooperate Cooperate Not cooperate 20,20 50,0 Cooperate 0,50 40,40 What is Nash equilibrium? Is it efficient? Why? What needs to be complied with so that the players would like to cooperate? What happens when one of the players does not cooperate? Why? Define trigger strategy. Calculate the discount factor (δ) that would make both players decide to cooperate.QUESTION 14 Which of the following is the Nash equilibrium of the game in the picture? Du Q = 30 Q = 40 Q = 30 du's profit = 900 Etisalat du's profit = 1000 Etisalat's profit = 900 Etisalat's profit = $750 Q = 40 Etisalat's profit = 1000 du's profit = 750 a. Du chooses 30, Etisalat chooses 40. b. Du chooses 30, Etisalat chooses 30. C. Du chooses 40, Etisalat chooses 40. d. Du chooses 40, Etisalat chooses 30. du's profit = 800 Etisalat's profit = 800The following is a static game: Convert this game into dynamic form game. Find the Nash equilibrium and subgame perfect Nash equilibrium of this game. If you consider this game as dynamic then what kind of dynamic game is this.
- From your own understanding on the concept of “Game Theory”, what can you conclude about the relationship between rules of the game and the outcome that results?Suppose China and the US are deciding whether to join an international agreement to mitigate climate change. The matrix below contains payoffs that represent each country’s net benefit from their decisions. Use this information to answer Question 24. CHINA USA Join Agreement Do Not Join Agreement Join Agreement (100,100) (0,125) Do Not Join Agreement (125,0) (25,25) [24] What does each country decide to do in a Nash equilibrium? AND What is the efficient outcome? Nash: Efficient:How many sellers/firms is a few? How would you define “strategic decision-making?” How does game theory relate to strategic decision-making?
- Give an example of a strategic game in which at the Nash equilibrium players play lotteries. Define the game and explain the logic that leads to the equilibrium choices.What is the link between game theory and market structures? Which market structure is game theory more linked to?5. When McDonald's Corp. reduced the price of its Big Mac by 75 percent if customers also purchased French fries and a soft drink, The Wall Street Journal reported that the company was hoping the novel promotion would revive its U.S. sales growth. It didn't. Within two weeks sales had fallen. Using your knowledge of game theory, what do you think disrupted Mcdonald's plans?