Firms a and b are the only firms in the market for widgets, Ask an Expert

Economics

Firms A and B are the only firms in the market for widgets. Each firm can choose between cooperating and fighting. If both firms choose to cooperate, each gets a profit of 10. If both firms choose to fight, each gets a profit of 5. If one chooses to cooperate and the other chooses to fight, the firm that chooses to cooperate gets a profit of 1 and the firm that chooses to fight gets a profit of 20. Each firm chooses the action that maximizes its profits.

(a) Suppose firms choose their actions simultaneously and they play this game once. Write the matrix of payoffs for this situation and find the pure strategy Nash equilibrium (or all equilibria) of the simultaneous-move game played by firms A and B.

(b) Suppose firms choose their actions simultaneously but the game is repeated during 10 years. So, when firms make their decisions in a specific year, each firm knows the choices of the other firm in the previous years. Find the equilibrium (or all equilibria) of this game.

View complete question

Business Economics, Economics

Category:- Business Economics
Reference No.:- M91520624

Have any Question?Write your Review or question?

Related Questions in Business Economics

In a population of phd students 50 have paid assistant

In a population of Ph.D students 50% have paid assistant ships. A random sample of n=200 students are chosen. What is the expected number of students who have paid assistant ships in this sample?

Each of 30 teams in a league has a demand for generic

Each of 30 teams in a league has a demand for generic advertising of Q = 260 - 4P. Price is measured in thousands of dollars. Ads cost $510,000 each. How many ads will the teams want to purchase as a group?

1 a cpu manufacturing company knows based on the machines

1. A CPU manufacturing company knows, based on the machines working at maximum productivity, that 90% of the CPU's coming off the line meet quality standards. The quality control inspector pulls 25 CPU's off the line to ...

If the marginal propensity to consume is equal to 030 what

If the marginal propensity to consume is equal to 0.30, what will be to total change in output (or income) that will result from an increase in government expenditure of 127.4?

Can you someone help me highlight the mistakes andor

Can you someone help me highlight the mistakes and/or half-truths in each of the following statements. a. If one looks at the budget incidence the poor in South Africa benefit most from the budget of government. b. Expen ...

1 the demand for good x is given by qxdnbsp 6000 - frac12

1. The demand for good X is given by: Q X d = 6,000 - ½ P X - P Y + 9P Z + 1/10M Research shows that the prices of related goods are given by P Y = $6,500 and P Z = $100, while the average income of the individuals ...

The first part of the question is how do you determine if a

The first part of the question is how do you determine if a data set is normally distributed? The second part of the question is what is the Z score and how is that related to the distribution.

A us electronics rm is considering moving its production to

A U.S. electronics ?rm is considering moving its production to a plant in Mexico. Its estimated production function is q = L0.5K0.5. In the U.S., the wage, w is ten dollars, and the cost of capital, r is also ten dollars ...

A test of high school study habits and attitudes supposedly

A test of high school study habits and attitudes, supposedly predictive of how well high school students will perform academically, is administered to twelfth graders during the same week that their cumulative grade poin ...

The increase in prescription drugs cost increases the drug

The increase in prescription drugs cost, increases the drug companies profit. Should there be restrictions to lower consumer cost and how much of their profit should be reinvested into research and development?

4,153,160 Questions Asked
13,132 Experts
2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Recent Questions

Ask Business Economics Expert