Two firms must simultaneously decide whether to enter a market. The payoffs resulting from their decisions are illustrated in the figure to the right. Determine the mixed-strategy Nash equilibrium for this game. The mixed-strategy Nash equilibrium is for Firm 1 to not enter with probability and for Firm 2 to not enter with probability 0₂ - (Enter your responses rounded to two decimal places) Don't enter Firm 2 Enter Don't enter 10 Enter

Two firms must simultaneously decide whether to enter a market. The payoffs resulting from their decisions are illustrated in the figure to the right. Determine the mixed-strategy Nash equilibrium for this game. The mixed-strategy Nash equilibrium is for Firm 1 to not enter with probability and for Firm 2 to not enter with probability 0₂ - (Enter your responses rounded to two decimal places) Don't enter Firm 2 Enter Don't enter 10 Enter

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter8: Game Theory

Section: Chapter Questions

Problem 8.1P

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Consider the following simultaneous game: Player 1 U D Player 2 L 20,-10 -10, 20 R -10, 20 20,-10 Please indicate whether each of the following statements is true or false. Player 1 has a dominant strategy. This game has a Nash equilibrium. This game has a Nash equilibrium in pure strategies. Player 1's best response is D if player 2 plays R.
Solve for the Nash equilibrium (or equilibria) in each of the following games. (a) The following two-by-two game is a little harder to solve since firm 2’spreferred strategy depends of what firm 1 does. But firm 1 has a dominantstrategy so this game has one Nash equilibrium. Firm 2 Launch Don’tFirm 1 Launch 60, -10 100, 0 Don’t 80, 30 120, 0 What is the Nash equilibrium of this simultaneous-move game? (b) What would the outcome of this game be if instead firm 1 moved first and then, after seeing what firm 1 chose, firm 2 chose it strategy? In this case firm 1 doesn’t necessarily need to choose a best response, but firm 2 must choose a best response since it moves second.
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Consider this as a simultaneous-move (static) game: Player A Top Bottom Player B Left Right ETEL UU 1.b) Does any player have a dominant strategy in this game? Explain. 1.a) Write down the Best Response Correspondence for each of the two players. Molimonsbestich Quinit 1.c) Find all Nash Equilibria in pure strategies of this game. 1.d) Is there any Nash Equilibria in mixed strategies? If so, find it. Elekt
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