User Account

All Pages

What will be the nash equilibrium in the one-shot game

Assignment Help Microeconomics
Reference no: EM13205380

Dr. Fine and Dr. Feelgood are the only two medical doctors offering immediate walk-in medical services in the town of Springfield. That is, they operate in a duopoly. Each doctor can charge either a high price or a low price for a standard medical visit. The accompanying matrix shows their payoffs, in profits per patient (in dollars), for any choice that the two doctors can make.

1. Suppose the two doctors play a one-shot game-that is, they interact only once and never again. What will be the Nash (non-cooperative) equilibrium in this one-shot game?

2. Now suppose the two doctors play this game twice. Also, suppose each doctor can play one of two strategies: it can play either "always charge the low price" or "tit for tat"- that is, it starts off charging the high price in the first period, and then in the second period it does whatever the other doctor did in the previous period. Write down the payoffs to Dr. Fine from the following four possibilities:

a) Dr. Fine plays "always charge the low price" when Dr. Feelgood also plays "always charge the low price."

FIRST Period Payoffs SECOND Period Payoffs TOTAL Payoffs
Charges
(high or low) Charges
(high or low)
Fine Fine
Feelgood Feelgood

b) Dr. Fine plays "always charge the low price" when Dr. Feelgood plays "tit for tat."

FIRST Period Payoffs SECOND Period Payoffs TOTAL Payoffs
Charges
(high or low) Charges
(high or low)
Fine Fine
Feelgood Feelgood

c) Dr. Fine plays "tit for tat" when Dr. Feelgood plays "always charge the low price."

FIRST Period Payoffs SECOND Period Payoffs TOTAL Payoffs
Charges
(high or low) Charges
(high or low)
Fine Fine
Feelgood Feelgood

d) Dr. Fine plays "tit for tat" when Dr. Feelgood also plays "tit for tat."

FIRST Period Payoffs SECOND Period Payoffs TOTAL Payoffs
Charges
(high or low) Charges
(high or low)
Fine Fine
Feelgood Feelgood

Reference no: EM13205380

Questions Cloud

Find the dimensions of the playground that maximixe : a rectangular playground is to be fenced and divided into two by another fence parrallel to one side of the play ground. 216 feet of fencing is used.find the dimensions of the playground that maximixe the total enclosed area.
What are the page numbers : a student opens a math book to two facing pages. The product of the page numbers is 506. What are the page numbers?
Find the area of the largest rectangle that can be inscribed : Find the area of the largest rectangle that can be inscribed in the ellipse below.
Identify the six basic computer operations : Identify the six basic computer operations. Explain each operation's role in a computer program and indicate whether it is part of a program's input component, processing component, or output component.
What will be the nash equilibrium in the one-shot game : Now suppose the two doctors play this game twice. Also, suppose each doctor can play one of two strategies: it can play either "always charge the low price" or "tit for tat"- that is, it starts off charging the high price in the first period
What is the effect of the new technology on the society : the effect of new technology on consumers is that it makes life easier for society. Cell phones have become miniature computers that can do just about anything we want now. Our cell phone for the past few years have a lot more processing power tha..
Find the area of the largest rectangle that can be inscribed : Find the area of the largest rectangle that can be inscribed in the ellipse below.
How much should the year end payments be : Assuming that this account pays ^% interest, how much should the year end payments be?
What are the expected net operating cash flows per year : What is the beta of J Corp's stock and using the CAPM model, what is the expected rate of return on J Corp. stock for the coming year?

Reviews

Write a Review

Microeconomics Questions & Answers

  Strategies of general electric and future teams

General Electric has frequently placed managers together to work on teams. Often the work project is only for a short period of time.

  Explain what is meant by diminishing returns

Explain what is meant by diminishing returns. From these costs curves explain when diminishing return sets in? Why and explain the relationship between ATC, AVC and AFC.

  Question about demand curves

The demand for new motor homes in the US is highly cyclical and sensitive to diesel fuel values and interest rates. Given these characteristics, explain the effect of the following on quantity demanded

  What affects firm''s decision-making

Identify an example in which a firm you are familiar with made a strategic decision that was focused on improving the organization's profitability. How did the market structure in which the firm competes affect the firm's decision-making?

  What is millers wacc

Miller Manufacturing has a target debt ratio of 70% (that means weight of debt is 70%). Its cost of equity is 18%, and its cost of debt is 10%. If the tax rate is 35%, what is Miller's WACC?

  Describe domestic sales

A domestic shoe company distributes running shoes and tennis shoes for $95 per pair. The marginal cost of producing a pair of running shoes is $60, and the marginal cost of producing a pair of tennis shoes is $45.

  What happens to the supply and quantity supplies

Beer and pizza are compliments because they are often enjoyed together. When the price of beer rises, what happens to the supply, demand, quantity supplies, quantity demanded, and the price in the market for pizza.

  How to determine last deposit

$3500 is deposited every year with 6% interest each year. 38 equal deposits are made. How much money can be withdrawn in 20 equal payments,beginning one year after the last deposit?

  What is the magnitude of consumer surplus

What is the magnitude of J.R.'s consumer surplus at the equilibrium price and how high must the price of ribs be for Judy to supply 20 ribs to the market?

  How many groschens should the council charge

The council decides to allow a boat to fish in the lake only if its owner buys a fishing licence. To maximize total profit (of citizens and council), how many groschens should the council charge for a licence?

  Economy fundamentals

Which is not a factor of production? Which is not one of the five fundamental questions that an economy must deal with?

  What are the characteristics of martian firms

Suppose life is discovered on Mars and that it turns out to be quite sophisticated. In fact, perfect competition prevails everywhere on the planet. Which of the following characteristics of Martian firms are we likely to observe

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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