Question

# One – period game If there are two companies who control the market and compete on...

One – period game

If there are two companies who control the market and compete on price what would the payoff matrix look like for the prisoner’s dilemma? DRAW THE MATRIX (Company A on top, B on the side, when both go high the profit \$36 for A and \$36 for B when both go low the profit is \$18 for A and \$18 for B, When A goes high and B goes low the profit is \$48 for B and \$16 for A and when A goes low and B goes high the profit is \$16 for B and \$48 for A and) What will they end up doing? What does it mean to have a dominant strategy in the prisoner’s dilemma? What is a Nash-equilibrium? Is the solution for this problem Nash?Would you expect the same result if this was a “repeated” game? Explain.

Game where someone goes first - What is backward induction

One-period game , Multi-period game - differences

What is the principal agent problem?

Negative / positive externalities.

Public goods, private goods, club goods, common goods

Tragedy of the commons

Under-funded, Free rider

.For a perfectly competitive industry.

If the equation for the Supply is P = 2Qs and the equation for the Demand is P = 120 - Qd

What equation determines the production level for a single firm if the firm is in a perfectly competitive market?

What is the equilibrium Quantity/Price, CS, PS, TS

What is the elasticity of demand at the equilibrium price and quantity? Is it elastic?

For a Monopoly.

If the equation for the Supply is P = 2Qs and the equation for the Demand is P =120 - Qd

What equation determines the production level for a monopoly firm?

What is the Monopoly Quantity/Price, MC, CS, MRent, PS, TS, DWL

If the marginal cost is 6, the price is 14 and the quantity produced is 8 what is the value of the monopoly rent?

What is the relationship between the price for monopoly, Oligopoly, a PC firm?

What is the relationship between the quantity for monopoly, Oligopoly, a PC firm?

Name a company that is perfectly competitive, oligopoly, monopoly, monopolistic competition

What are the differences between monopoly, oligopoly and monopolistic competition?

PC/Monopoly/Monopolistic Competition/Oligopoly – What are the characteristics

Three different models of Oligopoly

Cartel

Collusion

In case the game is repeated for n th period the equilibrium will be same. This is because, by backward induction given the strategy of the other player in the previous period it will be best for each player to play low. that is if in nth periof a player has to decide which strategy to play it will look back at n-1 th period. In this period the other player has chosen "low" given this the best move will be to choose "low" as well. then the equilibrium will remain the same for infinitely repeated game.