Question

Consider the following game regarding the decision to hold (H), not hold (NH) a currency. Compute:...

Consider the following game regarding the decision to hold (H), not hold (NH) a currency. Compute: The Nash equilibrium or equilibria:

A.

Firm B

Firm A H NH

H 1,1 1.5,0

NH 0,1.5 1,1

B. Consider the following game regarding the decision to hold (H), not hold (NH) a currency. Compute: The Nash equilibrium or equilibria when (H, NH)= (1.5, 0) is changed to (0.5, 0.5).

C. Consider the following game regarding the decision to hold (H), not hold (NH) a currency. Compute: Is there any dominant strategy in either Question A or Question B?

D. Compute:Do you think that this sort of game may be useful to explain current trends in commodity prices like the price of gold? Why or Why not?

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Consider the following simultaneous-move game: Column L M N P Row U (1,1) (2,2) (3,4) (9,3)...
Consider the following simultaneous-move game: Column L M N P Row U (1,1) (2,2) (3,4) (9,3) D (2,5) (3,3) (1,2) (7,1) (a) Find all pure-strategy Nash equilibria. (b) Suppose Row mixes between strategies U and D in the proportions p and (1 − p). Graph the payoffs of Column’s four strategies as functions of p. What is Column’s best response to Row’s p-mix? (c) Find the mixed-strategy Nash equilibrium. What are the players’ expected payoffs?
1) Consider the following game in which two firms decide how much of a homogeneous good...
1) Consider the following game in which two firms decide how much of a homogeneous good to produce. The annual profit payoffs for each firm are stated in the cell of the game matrix, and Firm A's payoffs appear first in the payoff pairs: Firm B - low output Firm B - high output Firm A - low output 300, 250 200, 100 Firm A - high output 200, 75 75, 100 a. What are the dominant strategies in this...
Consider the following one-shot simultaneous game: Firm 2 Advertising campaign Do nothing Firm 1 Advertising campain...
Consider the following one-shot simultaneous game: Firm 2 Advertising campaign Do nothing Firm 1 Advertising campain 3, 8 20, 8 Offer discounts 6, 8 9, 2 Do nothing 7, 10 9, 12 a. State all the dominated strategies in the game, by which strategy they are dominated, and whether weakly or strictly. b. What is the equilibrium outcome by dominance (by elimination of dominated strategies), if any? c. What is (or are) the pure strategy Nash equilibria of this game?
4. Consider the following non-cooperative, 2-player game. Each player is a middle manager who wishes to...
4. Consider the following non-cooperative, 2-player game. Each player is a middle manager who wishes to get a promotion. To get the promotion, each player has two possible strategies: earn it through hard work (Work) or make the other person look bad through unscrupulous means (Nasty). The payoff matrix describing this game is shown below. The payoffs for each player are levels of utility—larger numbers are preferred to smaller numbers. Player 1’s payoffs are listed first in each box. Find...
Consider the following 2 period sequential game. There are two players, Firm 1 and Firm 2....
Consider the following 2 period sequential game. There are two players, Firm 1 and Firm 2. They pro- duce identical goods and these goods are perfect substitutes. The inverse demand function in this market is given by P = 12 − (q1 + q2). Firm 1 moves first and choose its output q1. Firm 2 observes Firm 1’s decision of q1 and then chooses its output q2.\ Suppose that the cost function of both Firm 1 and 2 is given...
Consider the following game. Player 1’s payoffs are listed first, in bold:                        Player 2 X...
Consider the following game. Player 1’s payoffs are listed first, in bold:                        Player 2 X Y Player 1 U 100 , 6   800 , 4 M 0 , 0 200 , 1 D 10 , 20 20 , 20 Imagine that Player 1 makes a decision first and Player 2 makes a decision after observing Player 1’s choice. Write down every subgame-perfect Nash equilibrium of this game. Does the outcome above differ from the Nash equilibrium (if the game...
Question 2 Consider the following Bertrand game involving 2 firms producing differentiated products. Firms have no...
Question 2 Consider the following Bertrand game involving 2 firms producing differentiated products. Firms have no costs of production. Firm 1’s demand is q1 = 1-p1 + bp2, where b > 0. A symmetric equation holds for firm 2’s demand. a. Solve for the NE of the simultaneous price-choice game b. Compute the firms’ outputs and profits. c. Represent the equilibrium on a best-response function diagram. Show how an increase in b would change the equilibrium.
Consider the following information for a simultaneous move game: If you advertise and your rival advertises,...
Consider the following information for a simultaneous move game: 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. If you and your rival plan to be in business for only one year, the Nash...
Consider the following information for a simultaneous move game: If you advertise and your rival advertises,...
Consider the following information for a simultaneous move game: 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. If you and your rival plan to be in business for only one year, the...
Consider the following market entry game. There are two firms : firm 1 is an incumbent...
Consider the following market entry game. There are two firms : firm 1 is an incumbent monopolist on a given market. Firm 2 wishes to enter the market. In the first stage, firm 2 decides whether or not to enter the market. If firm 2 stays out of the market, firm 1 enjoys a monopoly profit of 2 and firm 2 earns 0 profit. If firm 2 decides to enter the market, then firm 1 has two strtegies : either...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT