ome Depot and Lowe's Are Deciding on Building New Stores. Below is the their profit matrix based on the number of stores. The Nash equilibrium Home Depot # stores 5 7 10 16,16 14,21 10,20 Lowe 7 21,14 15,15 9, 12 20,10 12,9 5,5 D Lowe 7, Home Depot 7 Lowe 7. Home Depot 5 Lowe 5. Home Depot 7 O Lowe 10, Home Depot s 10
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- Honda Toyota Large Small Don't expand Large Small 0,0 12, 8 18, 9 8, 12 16, 16 20, 15 Don't expand 9, 18 15, 20 18, 18 a) Are there any dominated strategies? b) What is the Nash equilibrium?1. There are two airline carriers, Delta and American, that are deciding how many flights to run from New York (JFK) to Houston (IAH) per day. Delta can run a morning flight (M), an afternoon flight (A), both flights or nothing. American can run an Evening (E) flight or nothing. The two firm's profits corresponding to each possible scenario of available flights is given below: Product (Flight) Selection Delta profit American profit 13 M,A M,A,E A,E 20 8 -4 1 E 12 M,E 11 8 А 9 a. Set up the payoff matrix for when the two firms simultaneously choose which flights to run. What is the Nash Equilibrium (or equilibria) of this game?Belge1 - Word eri Gözden Geçir Görünüm Yardım Ne yapmak istediğinizi söyleyin 1) Two firms, X and Y, are planning to market their new products. Each firm can develop TV, Laptop. Market research indicates that the resulting profits to each firm for the alternative strategies are given by the following payoff matrix ! FIRM Y TV LAPTOP PHONE FIRM X TV 30, 30 60. 35 20, 50 LAPTOP 40,70 20, 20 50,80 PHONE 50,20 80,50 10,10 A) Find the Nash equilibria for this game, assuming that both firms make their decisions at the same time. (explain the decision step by step); B) If each firm is risk averse and uses a maximin strategy, what will be the resulting equilibrium? (explain the decision step by step); C) What will be the equilibrium if Firm X makes its selection first? If Firm Y goes first?:
- fnan421 - Word Teri Gozden Geçir Görünum Yardım Ne yapmak istediğinizi soyleyin 2) Two firms, X and Y, are planning to market their new products. Each firm can develop TV, Laptop. Market research indicates that the resulting profits to each firm for the alternative strategies are given by the following payoff matrixi FIRM Y TV LAPTOP PHONE FIRM X TV 30, 30 50, 35 20, 50 LAPTOP 40,70 20, 20 50,80 PHONE 50,20 80,50 10,10 A) What will be the equilibrium if Firm X makes its selection first? If Firm Y goes first? ; (Ctrl) -For example, the lower left cell of the matrix shows that if Full Coop advertises and Lucky Bird does not advertise, Full Coop will make a profit of $14 million, and Lucky Bird will make a profit of $3 million. Assume this is a simultaneous game and that Lucky Bird and Full Coop are both profit- maximizing firms. If Lucky Bird chooses to advertise, it will earn a profit of $ advertise. million if Full Coop advertises and a profit of $ million if Full Coop does not If Lucky Bird chooses not to advertise, it will earn a profit of $ not advertise. million if Full Coop advertises and a profit of $ million if Full Coop does S If Full Coop advertises, Lucky Bird makes a higher profit if it chooses If Full Coop doesn't advertise, Lucky Bird makes a higher profit if it chooses Suppose that both firms start off by deciding not to advertise. If the firms act independently, what strategies will they end up choosing? Both firms will choose not to advertise. O Lucky Bird will choose not to…This exercise related to a game theory P 14 13 12 11 10 9 8 7 6 5 QD 50 100 150 200 250 300 350 400 450 500 Consider a market with the above demand and two firms. Both firms have a constant marginal cost of 7. 1. What price should these firms charge to maximize total industry profit? (Note: the marginal condition we learned will work here but you need to be careful because the changes in quantity on the schedule are not 1. Because of this, you might want to use a brute force approach here. It's worth thinking about how you would reconcile it with the marginal condition though. Also, the marginal condition doesn't match exactly so take the best number from the schedule.)......... 2. Assuming that if they set the same price, they split the market evenly, what will the profit of each firm be if they both set the above…
- It takes 3,000 households having average annual income of $50,000 within a 3-mile radius to support a grocerystore. There are actually 6,000 households within 3-miles of the Shop-Rite Grocery that have $50,000 per yearaverage incomes. Today, Shop-Rite is the only grocery store in this area. Using the concept of Nash Equilibrium inlocation, explain what the likely outcome will be for this area, given those conditions6. Using a payoff matrix to determine the equilibrium outcome Suppose there are only two firms that sell tablets: Padmania and Capturesque. The following payoff matrix shows the profit (in millions of dollars) each company will earn, depending on whether it sets a high or low price for its tablets. Padmania Pricing High Low Capturesque Pricing High LOW 8,8 13,4 4, 13 7,7 For example, the lower-left cell shows that if Padmania prices low and Capturesque prices high, Padmania will earn a profit of $13 million, and Capturesque will earn a profit of $4 million. Assume this is a simultaneous game and that Padmania and Capturesque are both profit-maximizing firms. If Padmania prices high, Capturesque will make more profit if it chooses a profit if it chooses a price. If Capturesque prices high, Padmania will make more profit if it chooses a profit if it chooses a ▼price. Considering all of the information given, pricing low If the firms do not collude, what strategies will they end up…Only two firms, Acme and Stuff Inc., sell a particular product. The table below shows the demand curve for their product. Each firm has the same constant marginal cost of $10 and zero fixed cost (so MC-ATC=$10). Price Quantity Total Revenues 10 70 65 60 55 50 45 40 28889 35 30 25 20 15 10 15 0 100 200 300 400 500 600 700 800 900 1000 1100 1200 1300 1400 0 If Acme and Stuff Inc are able to collude, how much will Acme produce? 6500 12000 16500 20000 22500 24000 24500 24000 22500 20000 16500 12000 6500 0
- Refer to the table below to answer the following questions. Table 14.2.10 Fim A Comply A: Sim Cheat A $1 Sm Comply B Sim B-S05m Firm B A:-50.5m A0 Cheat B $15m B:0 Refer to Table 14.2.10. Firm A and Firm B are the only producers of soap powder. They collude and agree to share the market equally. The equilibrium a dominant strategy equilibrium because the strategy in this game is for a firm Select one O A is to comply regardless of the other firm's choice O B.is to comply when the other firm cheats and to cheat when the other firm complies O Cis not to comply when the other firm complies and to cheat when the other firm cheats OD. is to cheat regardless of the other firm's choice OEis not to comply when the other firm cheats and to cheat when the other firm complies 219 PMThe table below shows market share data for different firms producing desks. Market Share in % 15 18 7 11 6 10 4 5 5 16 Firm Aardvark Inc Baluga, LLC Cran Inc Delta Co Echo Co Farriss Co Gum Drop Inc Hill Corp Indigo Corp Jackson Co What is the Herfindahl Hirschman Index (HHI) for this market? ← HHI 225 324 49 121 36 100 16 25 25 256 Suppose that Delta Co and Gum Drop Inc are considering a merger. What will the HHI be after this merger?6. Using a payoff matrix to determine the equilibrium outcome Suppose there are only two firms that sell tablets: Padmania and Capturesque. The following payoff matrix shows the profit (in millions of dollars) each company will earn, depending on whether it sets a high or low price for its tablets.
