What is the nash equilibrium for the one-shot game

Assignment Help Business Economics
Reference no: EM131172377

Burger King and Wendy’s are engaging into the following one-shot game: if Burger King advertises and Wendy’s does not, Burger King will make $20 million in profits and Wendy’s will make $6 million. If Wendy’s advertises and Burger King does not, Burger King will make $2 million and Wendy’s will make $6 million. If Burger King advertises and Wendy’s advertises, each firm earns $10 million. If neither firm advertises, Wendy’s will make $8 million and Burger King will make $4 million.

(a) Write the payoff matrix for the above game.

(b) Does Burger King have a dominant strategy?

(c) Does Wendy’s have a dominant strategy?

(d) What is the Nash equilibrium for the one-shot game?

Reference no: EM131172377

Questions Cloud

Why the flexibility of wages and prices tend to favor : Describe one (1) reason why the flexibility of wages and prices tend to favor the Keynesian economic view in the short run and one (1) reason why the flexibility of wages and prices tend to favor the classical economic view in the long run.
Worker with similar levels of education in other? industries : In the United States in? 2011, there were 104 fatalities per? 100,000 workers in the logging industry. This is the? second-highest rate after the fisheries industry. Everything else? equal, would you expect workers in the logging industry to be paid ..
How much is firms total-total variable and total fixed costs : The figure above represents Giuliani’s farm a profit-maximizing perfectly competitive firm with the price of its product been equal to $7. Explain your answers. How much is the firm's total, total variable, and total fixed costs? How much is the firm..
Suppose wages in the market for plumbers increase : Suppose wages in the market for plumbers increase. Some plumbers start taking on extra plumbing jobs while others cut back on the number of hours they work. What could explain? this?
What is the nash equilibrium for the one-shot game : Burger King and Wendy’s are engaging into the following one-shot game: if Burger King advertises and Wendy’s does not, Burger King will make $20 million in profits and Wendy’s will make $6 million. Write the payoff matrix for the above game. Does Bur..
Monopolistic competitive firm-what quantity will be produced : The figure above represents Athina's pool supply store, a monopolistic competitive firm. Explain your answers. What quantity will be produced? What price will be charged? What is Athina's economic profit or loss? Is this a long-run equilibrium? Why o..
All social costs occurred under hyperinflation described : Every day, workers in Oceania receive salary twice, once in the noon and once in the afternoon. Usually, the afternoon salary is dramatically higher than the noon one while the noon one is astonishingly higher than yesterday’s afternoon one. Please l..
Distinction between general and specific human capital : Which of the following is a distinction between general and specific human capital?  The gains from specific training in human capital tend to go to the:
The gains from general training in human capital tend : The gains from general training in human capital tend to go to the: The extra wage that is paid to an individual to attract him/her to a less desirable job is called:

Reviews

Write a Review

Business Economics Questions & Answers

  What is the law of demand

Insurers want to understand the Bay Area market for pediatric physician primary care services, to help decide the appropriate reimbursement rate for a pediatric primary care visit. Let the demand for pediatric visits be Q = 240 – P, and let the suppl..

  Phenomenal increase in the number of customers

Traditional brick and mortar retail stores are losing their customer base while their online competitors are seeing phenomenal increase in the number of customers. Examine the differences and similarities (where possible) in the two modes of retail i..

  An assembly-line worker is more likely to exert less effort

An assembly-line worker is more likely to exert less effort and produce fewer units when he is paid by the hour than when he is paid based on the number of units produced.

  What is the actuarially fair premium for each type of policy

Chimnesia has two equally sized groups of people: smokers and nonsmokers. Both types of people have utility U = ln(C), where C is the amount of consumption that people have in any period. So long as they are healthy, individuals will consume their en..

  Opportunity cost of josephine''s trip to the wedding

What is the opportunity cost of Josephine's trip to the wedding

  Firm takes two inputs-labor-capital-as perfect substitutes

Suppose a firm takes two inputs, labor and capital, as perfect substitutes. In addition, this firm can substitute one labor for one capital. If wage is $2000 and rental rate for capital is $3000, what is the optimal labor and capital usage for this f..

  Research paper about social problems

Prepare a five page research paper about social problems where the free markets are not allowed to function, which includes the market for a particular illegal good and service, a regulated market, etc.

  Extensive-form diagram of the monty hall three-door game

Draw the extensive-form diagram of the Monty Hall three-door game. In this game, the host (player 1) privately selects an envelope in which to put the prize money (A, B or C). The contestant (player 2) does not observe the host's choice but then must..

  Key distinctions between these two economic eras

After the various crises of the 1970's, the US economy recovered to some degree, but the era (1981-2008) was markedly different from the ‘golden age’. Name and discuss a few of the key distinctions between these two economic eras (NOT the crisis year..

  Explain events on the interest rate in the loanable funds

Explain the effect of the following events on the interest rate in the loanable funds market. Demonstrate you answer graphically. tax revenue is lower than expected and people expect cities to default on municipal bonds. They sell thier bonds and..

  Suppose the government cuts income taxes

Suppose the government cuts income taxes. Show the IS/LM model the impact of the tax cut under two assumptions. (1) Government keeps interest rates constant through an accommodating monetary policy. (2) The money stock remains unchanged. Explain the ..

  Depositing money into savings account

John and Peter both want to save some money. John decides to save $1,000 every year in an account that pays 4% interest per year compounded annually. How much will be in each person’s account at the end of 20 years, counting from when John started sa..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd