Exam 13: Strategic Games

Use the following case from question Irene's Dairy is deciding whether or not to enter the market for ice cream,currently monopolized by Mattie's Ice-cream.If it enters the market,Mattie's can either accommodate him and share his 10million in profits equally with Irene or fight him and cause a 5million loss for each in a price war.​ -​In a sequential game,if Irene decides to enter the market,what would be Mattie's best response?

​Use the following to answer question Consider the following information for a simultaneous move game:  If you charge a low price (LP)and your rival charges a LP,you each earn $5 million in profits.  If both charge a high price (HP),each will each earn $10 million in profits.  However,if one charge a LP and the other does not,the firm that charges a LP will earn $15 million and the other firm will earn $1 million. -​If the game continues for infinity,then the new Nash Equilibrium is

​Refer to the following normal form game of price competition question -​Suppose that Firm A cheats,and B does not. What is A's payoff from cheating?

​Use the following case from question Two siblings,Bratty Brenda and Tattling Tina are playing a simultaneous hit and tell game.Bratty Brenda can hit Tattling Tina or not and Tattling Tina can tattle on Bratty Brenda or not.Relative to no hitting and no tattling,if Bratty Brenda hits Tattling Tina,and she tattles they both experience a loss of 10.Not telling,gets Tattling Tina a bruise,a loss of 5 but Bratty Brenda gains 5.If she tattles untruthfully,Tattling Tina gets a gain of 5 and Bratty Brenda loses 5.If they get along,no one gets anything -​If Tattling Tina does not tattle,what would Bratty Brenda's best response be

​Use the following case from question Two siblings,Bratty Brenda and Tattling Tina are playing a simultaneous hit and tell game.Bratty Brenda can hit Tattling Tina or not and Tattling Tina can tattle on Bratty Brenda or not.Relative to no hitting and no tattling,if Bratty Brenda hits Tattling Tina,and she tattles they both experience a loss of 10.Not telling,gets Tattling Tina a bruise,a loss of 5 but Bratty Brenda gains 5.If she tattles untruthfully,Tattling Tina gets a gain of 5 and Bratty Brenda loses 5.If they get along,no one gets anything -​If Tattling Tina threatens to tell,what would Bratty Brenda's best response be?

​Use the following setup for the question. Assume a simultaneous-move game. -​What is the best response of firm B,given firm A is charging a low price?

​Use the following case from question A couple gets into an argument deciding where they would go out together.Both like to spend like with each other and have the payoffs as below -​If the boxing match will be the "fight of the century" which has dramatically increased Sally's payoffs for going to the fights,even without Sam,and Sam knows that,what would the Nash equilibrium be now?

​Use the following case from question Two siblings,Sarah and Tom are playing a simultaneous hit and tell game.Sarah can hit Tom or not and Tom can tattle on Sarah or not.Relative to no hitting and no tattling,if Sarah hits Tom,and he tattles they both experience a loss of 10.Not telling,gets Tom a bruise,a loss of 5 but Sarah gains 5.If he tattles untruthfully,he gets a gain of 5 and Sarah loses 5.If they get along,no one gets anything -​If Tom wants to not be hit,what strategy could he follow

​Use the following to answer question Consider the following information for a simultaneous move game:  If you charge a low price (LP)and your rival charges a LP,you each earn $5 million in profits.  If both charge a high price (HP),each will each earn $10 million in profits.  However,if one charge a LP and the other does not,the firm that charges a LP will earn $15 million and the other firm will earn $1 million. -​What is the Nash equilibrium of the game?

​Which of the following is a violation of the antitrust laws?

​Use the following case from question Two roommates John and Joe are playing a simultaneous game of cleaning the apartment.If neither of them clean,the apartment gets filthy and both get a utility of 2.If John cleans and Joe doesn't,John gets a utility of 1 and Joe gets a utility of 4.If Joe cleans and John doesn't,Joe gets a utility of 1 and John gets a utility of 4 and if both clean up the apartment,they each get a utility of 3. -​If the roommates played the game repeatedly where one roommate not cleaning this time would trigger the other roommate not cleaning next time,the Nash equilibrium is most likely to be