advertises, you each will earn $4 million in profits. If neither of you advertises, 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 $1 million and the non-advertising firm will earn $5 million. If you and your rival plan to be in business for 10 years, then the Nash equilibrium
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q19
If you advertise and your rival advertises, you each will earn $4 million in profits. If neither of you advertises, 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 $1 million and the non-advertising firm will earn $5 million. If you and your rival plan to be in business for 10 years, then the Nash equilibrium is
a. for each firm to not advertise in any year.
b. for neither firm to advertise in early years but to advertise in later years.
c. for each firm to advertise every year.
d. for each firm to advertise in early years but not advertise in later years.
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- q52 If you advertise and your rival advertises, you each will earn 14 million in profits. If neither of you advertises, you will each earn 20 million in profits. However, if one of you advertises and the other does not, the firm that advertises will earn 10 million and the non-advertising firm will earn 16 million. If you and your rival plan to be in business for only one year, the Nash equilibrium is a. for each firm to advertise. b. for the other firm to advertise and your firm not to advertise. c. for your firm to advertise and the other not to advertise. d. for neither firm to advertise.If you advertise and your rival advertises, you each will earn $4 million in profits. If neither of you advertises, 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 $1 million and the non-advertising firm will earn $5 million. If you and your rival plan to be in business for only one year, the Nash equilibrium is Group of answer choices for each firm to advertise. for neither firm to advertise. for your firm to advertise and the other not to advertise. none of the provided answers. Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.If you advertise and your rival advertises, you each will earn $4 million in profits. If neither of you advertises, 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 $1 million and the non-advertising firm will earn $5 million. If you and your rival plan to be in business for 10 years, then the Nash equilibrium is Multiple Choice for each firm to advertise every year. for neither firm to advertise in early years but to advertise in later years. for each firm to not advertise in any year. for each firm to advertise in early years but not advertise in later years.
- There are two firms in an industry, Firm A and Firm B. If firm A and firm B both advertise, they each will earn $5 million in profits. If neither firm advertises, they will each earn $10 million in profits. However, if one firm advertises and the other does not, the firm that advertises will earn $15 million and the non-advertising firm will earn $1 million. List all Nash equilibrium to this game. Both firms advertise Firm A advertises and Firm B does not Firm B advertises and Firm B does not Neither firm advertises No Nash equilbrium existsDairy King Advertise Doesn't Advertise Advertise 7,7 12, 3 Creamland Doesn't Advertise 3, 12 10, 10 For example, the upper right cell shows that if Creamland advertises and Dairy King doesn't advertise, Creamland will make a profit of $12 million, and Dairy King will make a profit of $3 million. Assume this is a simultaneous game and that Creamland and Dairy King are both profit-maximizing firms. If Creamland decides to advertise, it will earn a profit of not advertise. million if Dairy King advertises and a profit of million if Dairy King does If Creamland decides not to advertise, it will earn a profit of does not advertise. million if Dairy King advertises and a profit of million if Dairy King If Dairy King advertises, Creamland makes a higher profit if it chooses If Dairy King doesn't advertise, Creamland makes a higher profit if it chooses Suppose that both firms start off not advertising. If the firms act independently, what strategies will they end up choosing? ◇ Creamland will…Tobacco companies have often argued that they advertise to attract more existing smokers and not to persuade more people to smoke. Suppose there were just two cigarette manufacturers, Jones and Smith. Each can either advertise or not advertise. If neither advertises, they each capture 50 percent of the market and each earns $10 million. If they both advertise, they again split the market evenly, but each spends $2million on ads and so each earns just $8million (remember, advertising is not supposed to encourage more people to smoke). If one company advertises but the other does not, then the company that advertises attracts many of its rival's customers. As a result, the company that advertises earns $12 million and the company that does not earns just $6 million. Advertise Don't Advertise Smith: 8 Smith: 6 Advertise Jones: 8 Jones: 12 Jones Smith: 12 Smith: 10 Don't Advertise Jones: 6 Jones: 10 What is each firm's dominant strategy? Both firms' dominant strategy is to advertise. Both…
- Airbus and Boeing are the two largest producers of commercial aircraft in the world. They are each trying to determine whether or not they should build an ultra-large passenger plane. They have both decided that building such a plane would be profitable, but only if one of them produces it. The market is simply not large enough for them to both make profits selling this new plane. Consequently, if they both produce the plane, each will lose $10 billion. If only one of them produces, that firm will make $50 billion. Regardless of what the other does, if they choose not to produce the plane, they neither make nor lose money. a. Construct the normal or strategic form of this game and find the pure strategy NE. b. Airbus is a corporation in the European Community while Boeing is an American corporation. The EC has a long history of subsidizing Airbus as well as other man- ufacturers it deems important. Let us remodel this game assuming that the EC tells Airbus that if Airbus produces the…Firm A Strategy Advertise Don't Advertise Firm B Advertise 0,0 -1,40 Don't Advertise 40, -1 10, 10 Two cigarette manufacturers play the following simultaneous-move billboard advertising game. Profit payoffs for both companies are shown in the normal form game below. There is a 20 percent chance that the government will ban cigarette sales in any given year. If they collude and Firm A cheats, how much will Firm A earn in period 1? (Enter a numerical value as your answer with no decimal points. For example, if your answer is "one hundred" you need to type in "100"). What is the probability that the game will end? (Enter a numerical value as your answer with no decimal points. For example, if your answer is "one hundred percent" you need to type in "100"). If they collude and Firm A cheats, what will be the profit for Firm A for all periods? (Enter a numerical value as your answer with no decimal points. For example, if your answer is "one hundred" you need to type in "100"). If they…16. Boeing is considering whether it should develop its next aircraft with a wide body (WIDE) or whether it should make it a long aeroplane (LONG). Airbus, Boeing's competitor, also has a choice between choosing WIDE or LONG. The payoffs to the two companies are shown in the payoff matrix below. What are the (pure strategy) Nash equilibrium in this game? (The first action in the brackets is the strategy of Boeing, while the second is Airbus's strategy.) Airbus WIDE LONG WIDE 40 for Airbus Boeing 50 for Boeing O for Airbus 0 for Boeing LONG 0 for Airbus 0 for Boeing 50 for Airbus 40 for Boeing a. (WIDE, WIDE) for Boeing and Airbus respectively) and (WIDE, LONG) b. (LONG, WIDE) and (WIDE, LONG) c. (WIDE, WIDE) d. (LONG, LONG) e. (WIDE, WIDE) and (LONG, LONG)
- 8. To advertise or not to advertise Suppose that Creamland and Dairy King are the only two firms that sell ice cream. The following payoff matrix shows the profit (in millions of dollars) each company will earn depending on whether or not it advertises: Creamland Dairy King Advertises Doesn't Advertise 9,9 Doesn't Advertise 3, 15 Advertises 15, 3 11, 11 For example, the upper-right cell shows that, if Creamland advertises and Dairy King doesn't advertise, Creamland will make a profit of $15 million, and Dairy King will make a profit of $3 million. Assume this is a simultaneous game and that Creamland and Dairy King are both profit-maximizing firms. If Creamland decides to advertise, it will earn a profit of $ not advertise. If Creamland decides not to advertise, it will earn a profit of $ does not advertise. million if Dairy King advertises and a profit of $ If Dairy King advertises, Creamland makes a higher profit if it chooses million if Dairy King advertises and a profit of $…Consider the 2-player, zero-sum game "Rock, Paper, Scissors". Each player chooses one of 3 strategies: rock, paper, or scissors. Then, both players reveal their choices. The outcome is determined as follows. If both players choose the same strategy, neither player wins or loses anything. Otherwise: "paper covers rock": if one player chooses paper and the other chooses rock, the player who chose paper wins and is paid 1 by the other player. "scissors cut paper": if one player chooses scissors and the other chooses paper, the player who chose scissors wins and is paid 1 by the other player. "rock breaks scissors": if one player chooses rock and the other player chooses scissors, the player who chose rock wins and is paid 1 by the other player. We can write the payoff matrix for this game as follows: rock paper scissors rock 0 paper 1 0 scissors 2. Suppose now we alter the game so that whenever Colin chooses "paper" the loser pays the winner 3 instead of 1: rock paper scissors rock 0…. OPEC, the Organization of Petroleum Exporting Countries, was founded in 1969. Their original objective was to form a cartel to increase the price that they receive for their oil exports. Create a prisoner’s dilemma type game for two large members of OPEC (e.g. Saudi Arabia and Indonesia). Create numbers, where payoffs are total annual oil export revenues for each of these two countries. Verbally explain how you got your numbers. Find the Nash equilibrium. Based on this model, what strategy is in the oil exporters’ best interest (Nash or otherwise)? How do they make it happen? Create another prisoner’s dilemmamodel for all of OPEC on one side, and all non OPEC oil exporting nations on the other side. Create numbers, where payoffs are total annual oil export revenues for each of the two sides. Verbally explain how you created your numbers. Also create your numbers applying the fact that OPEC’s total production capacity is greater than total non OPEC exports…
