Ask Question, Ask an Expert

+61-413 786 465

info@mywordsolution.com

Ask Microeconomics Expert

United States and Russia are considering policies to open or close their import markets. Suppose the payoff matrix has payoffs of x,y, where X is the payoff to the US and Y the payoff to Russia

Russia
Open Close
Open 10,10 5,5
US
Close -100,5 1,1

Assume that each country knows the payoff matrix and believes that the other country will act only in its own interest. Does either country have a dominant strategy? what will be the equilibrium policies if each country acts rationally to maximize its own welfare?

Now assume that Russia is not certain that US will behave rationally. In particular, Russia is concerned that US' Politicians may want to penalize Russia even if that does not maximize the US welfare. How might this affect Russia's choice of strategy? How might this change the equilibrium outcome? Would that be a Nash Equilibrium? Why or why not?

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M91100265

Have any Question?


Related Questions in Microeconomics

Question until recently marie worked as an program manager

Question: Until recently Marie worked as an program manager, earning $45,000 annually. Then she opened a Peruvian restaurant downtown. At the end of the first year, her books showed total revenues of $200,000 and total c ...

Question standard economic theory examines competition as

Question: Standard economic theory examines competition as the number of firms within the market. What was Hayek's contention with this view in The Meaning of Competition? Instead, what did Hayek say was the better way t ...

Question the marginal private costs and the marginal

Question: The marginal private costs and the marginal private benefits of a firm producing fuel-efficient cars is represented in the following diagram (show the equilibrium P market, Q market). The government would like ...

Question the directors of ace airlines have decided to

Question: The directors of Ace Airlines have decided to incentivize their 1,000 employees by issuing every one of them 200 shares of stock. (Assume there is no problem of equity dilution, because the company has 40 milli ...

Question suppose you work for a large retail chain in the

Question: Suppose you work for a large retail chain in the US that is considering expanding abroad. You are asked to determine whether the initial investment should be made in Mexico, Argentina, Brazil, or Chile. Explain ...

Question an economic union requires giving up some

Question: An economic union requires giving up some political autonomy to succeed. What are some examples of political power countries must give up to be members of an economic union? The response must be typed, single s ...

Question your executive team has asked you to be a mentor

Question: Your executive team has asked you to be a mentor for a new MBA graduate who was assigned to accompany you on your next trip to Asia. As you begin your discussion with the new graduate, you sense that there are ...

Question joyce loves to work and loves earning money john

Question: Joyce loves to work and loves earning money. John loves relaxing and doesn't care about money. Assume that John and Joyce have the same wage of $10 per hour. (2pts) a. Graphically show a wage rate at which Joyc ...

Question write a short essay of about 750 words each on the

Question: Write a short essay of about 750 words each on the following topics: 1. What are the common defenses of protectionism? Evaluate them. 2. Explain Coase Theorem and show how it works with examples. 3. How does Ma ...

Question the existence of the electoral college is one

Question: (The existence of the Electoral College is one indicator that the United States is not a true democracy in terms of representation. In a true democracy, each individual vote would count in a presidential electi ...

  • 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

Why might a bank avoid the use of interest rate swaps even

Why might a bank avoid the use of interest rate swaps, even when the institution is exposed to significant interest rate

Describe the difference between zero coupon bonds and

Describe the difference between zero coupon bonds and coupon bonds. Under what conditions will a coupon bond sell at a p

Compute the present value of an annuity of 880 per year

Compute the present value of an annuity of $ 880 per year for 16 years, given a discount rate of 6 percent per annum. As

Compute the present value of an 1150 payment made in ten

Compute the present value of an $1,150 payment made in ten years when the discount rate is 12 percent. (Do not round int

Compute the present value of an annuity of 699 per year

Compute the present value of an annuity of $ 699 per year for 19 years, given a discount rate of 6 percent per annum. As