Question

Answer the following questions about oligopolistic markets for a simultaneous game in which Microsoft and Apple...

Answer the following questions about oligopolistic markets for a simultaneous game in which Microsoft and Apple decide whether to advertise or not.

Players: Apple and Microsoft (MS)

Strategies: Advertise (A) or No-Ads (NA)

Payoffs:

If both choose to A, Apple gets $8 billion revenue and MS gets $16 billion revenue;

If Apple choose A and MS choose NA, Apple gets $15 billion and MS gets $12 billion;

If Apple choose NA and MS choose A, Apple gets $10 billion and MS gets $8 billion;

If both choose NA, Apple gets $12 billion and MS gets $6 billion.

a. Write the payoff matrix given the information above.

Microsoft
Strategy
Apple

b. Is there a dominant strategy for Microsoft? Why or why not?

c. Is there a dominant strategy for Apple? Why or why not?

d. Is there a Nash Equilibrium (NE)? If so, what is the NE for this game and what is the payoff to each player under NE?

e. Is this game a Prisoner’s Dilemma? Explain why or why not.

f. In an oligopoly market, do individual firms pay attention to the behavior of other firms? Explain 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
Problem 1: For the following, please answer "True" or "False" and explain why. In simultaneous move...
Problem 1: For the following, please answer "True" or "False" and explain why. In simultaneous move game where one player has a dominant strategy, then he is sure that he will get the best possible payoff in a Nash equilibrium. In a simultaneous game where both players prefer doing the opposite of what the opponent does, a Nash equilibrium does not exist. If neither firm has a dominant strategy, a Nash equilibrium cannot exist.
The matrix below shows payoffs in a stag hunt game. If both hunters hunt stag, each...
The matrix below shows payoffs in a stag hunt game. If both hunters hunt stag, each gets a payoff of 4. If both hunt hare, each gets 3. If one hunts stag and the other hunts hare, the stag hunter gets 0 and the hare hunter gets 3. Hunter B hunt stag hunt hare hunt stag 4,4 0,3 Hunter A hunt hare 3,0 3,3 (a) If you are sure that the other hunter will hunt stag, what is the best...
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...
1. The concentration ratio for an industry with four firms shows the: a) total market capitalization...
1. The concentration ratio for an industry with four firms shows the: a) total market capitalization of the four firms. b) percentage of profits accounted for by the four firms. c) percentage of sales accounted for by the four firms. d) total costs of production of the four firms. e) total quantity of output of the four firms. 2. When the four-firm concentration ratio is less than 40 percent, we can conclude that: a) the industry is monopolistically competitive. b)...
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...
4. The Windows operating system from Microsoft, Inc. runs about 90% of the world’s personal computers,...
4. The Windows operating system from Microsoft, Inc. runs about 90% of the world’s personal computers, so it is natural to think that Microsoft has a monopoly in the market for operating systems. According to economist Richard Schmalensee, an expert on oligopoly and monopoly, Microsoft’s profit-maximizing monopoly price is between $900 and $2,000. That’s the amount Microsoft would charge if it acted like a regular monopolist. However, Microsoft has tended to charge only $99 for Windows. Perhaps Microsoft is an...
g 1) Farmers can plant either corn or soybeans in their fields. Which of the following...
g 1) Farmers can plant either corn or soybeans in their fields. Which of the following would cause the supply of soybeans to increase? A) an increase in the price of soybeans B) a decrease in the price of corn C) an increase in the demand for corn D) an increase in the price of soybean seeds E) an increase in the price of tomatoes 2) For a perfectly competitive firm, which of the following is not trueat profit maximization?...
Assume that consumers view tax preparation services as undifferentiated among producers, and that there are hundreds...
Assume that consumers view tax preparation services as undifferentiated among producers, and that there are hundreds of companies offering tax preparation in a given market. The current market equilibrium price is $120. Jojo’s Tax Service has a daily, short-run total cost given by TC = 100 + 4Q2. Answer the following questions: How many tax returns should Jojo prepare each day if her goal is to maximize profits? How much will she earn in profit each day? A perfectly competitive...
Assume that consumers view tax preparation services as undifferentiated among producers, and that there are hundreds...
Assume that consumers view tax preparation services as undifferentiated among producers, and that there are hundreds of companies offering tax preparation in a given market. The current market equilibrium price is $120. Jojo’s Tax Service has a daily, short-run total cost given by TC = 100 + 4Q2. Answer the following questions: How many tax returns should Jojo prepare each day if her goal is to maximize profits? How much will she earn in profit each day? A perfectly competitive...
Please answer the following Case analysis questions 1-How is New Balance performing compared to its primary...
Please answer the following Case analysis questions 1-How is New Balance performing compared to its primary rivals? How will the acquisition of Reebok by Adidas impact the structure of the athletic shoe industry? Is this likely to be favorable or unfavorable for New Balance? 2- What issues does New Balance management need to address? 3-What recommendations would you make to New Balance Management? What does New Balance need to do to continue to be successful? Should management continue to invest...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT