Budweiser Low Medium High Low 120, 90 115, 100 90, 70 Miller Medium 100, 70 130, 60 60, 50 High 90, 20 120, 40 100, 80 Numbers in each cell are profits from the size of an advertising budget- Miller first (in bold), then Budweiser. wo beer companies face the payoff table above for choosing an advertising budget. Does this decision problem have a Nash equilibrium? If so, what is it? Select one: O a. Yes. Low for Miller , Low for Budweiser. O b. No. There is no Nash equilibrium. O. Yes. Low for Miller, Medium for Budweiser. O d. Yes. High for Miller, High for Budweiser.

Budweiser Low Medium High Low 120, 90 115, 100 90, 70 Miller Medium 100, 70 130, 60 60, 50 High 90, 20 120, 40 100, 80 Numbers in each cell are profits from the size of an advertising budget- Miller first (in bold), then Budweiser. wo beer companies face the payoff table above for choosing an advertising budget. Does this decision problem have a Nash equilibrium? If so, what is it? Select one: O a. Yes. Low for Miller , Low for Budweiser. O b. No. There is no Nash equilibrium. O. Yes. Low for Miller, Medium for Budweiser. O d. Yes. High for Miller, High for Budweiser.

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter15: Strategic Games

Section: Chapter Questions

Problem 4MC

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Similar questions

Profits for two competing firms depend on the decisions to advertise or not to advertise as follows: If neither firm advertises, each makes a weekly profit of $100. If one firm advertises while the other does not, the firm that advertises makes $120 while the firm that doesn’t advertise makes $60. If both firms advertise, each firm makes $80. (a) What is the Nash equilibrium? Is this outcome efficient, from the perspective of the two firms? (b) How does the outcome of the game change if the parties can make a binding agreement in advance about advertising practices? (c) How does the game change if it is repeated over the course of many weeks (but the firms cannot make a binding agreement about how much advertising they will do)?
How would you solve for the Nash equilibrium total output, and total market profit? (see image))
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Discuss main motivations to use the Nash Equilibrium as a solution concept.
Jagtar and Ravi both grow mangoes, which they sell in the same local market. They are deciding whether to pick 5 baskets worth of mangoes or 10 baskets, and have the following profit matrix: Jagtar 5 1 17 5 1 22 16 14 Ravi 1 24 14 a. What is the Nash equilibrium if both individuals make their decisions simultaneously? b. Does your analysis change if the local market charges a lump-sum fee of 12 to set up a stall and sell the mangoes in the space it provides? c. What would happen if the local market were instead to charge a lump-sum fee of 18?
Two rival companies competing in the same market need to decide their plans for future expansion of their stores. The Table below shows the possible outcomes of their mutually interdependent actions (payoffs are profits in £m) Giga Company Titanic Conglomerate No Change Refurbishment of existing stores Large Expansion No Change 30, 40 25, 35 15, 24 Refurbishment of existing stores 35, 30 28, 32 18, 33 Large Expansion 12, 22 18, 20 20, 25 The Nash equilibrium: (A) does not exist. (B) occurs when both firms choose Refurbishment of existing stores. (C) occurs when both firms choose Large Expansion. (D) occurs when both firms choose No Change.
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. 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…
Find Nash equilibrium using cell by cell inspection
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Consider the following game theory matrix with two firms and the effects of profits with the preferences on high versus low advertising budgets. Firm B's advertising Firm A's advertising A = low, $100 Blow, $100 A-low, B-high, $120 A = high, $120 B = low, $60 A=high, $80 B = high, $80 Identify the best strategy for firm B? a) Advertise High b) Advertise low. c) Don't advertise. d) Can't be decided with the given information.
why is a nash equilibrium stable