b) Problems: 2, 6, and 10.
DQ11: Do the duopolists in a Cournot equilibrium face a prisoners’ dilemma? Explain.
Discussion Question 12: How did the 1971 law that banned cigarette advertising on television solve the prisoners’ dilemma for cigarette producers?
Discussion Question 13:( a) What is the meaning of tit-for-tat in game theory?( b) What conditions are usually required for tit-for-tat strategy to be the best strategy?
Problem 2: From the following payoff matrix, where the payoffs are the profits or losses of the two firsts, determine( a) whether firm A has a dominant strategy,( b) whether firm B has a dominant strategy,( c) the optimal strategy for each firm, and( d) the Nash equilibrium, if there is one.
Problem 6: Explain why the payoff matrix in problem 1 indicates that firms A and B faces the prisoner’ s dilemma
Problem 10: Given the following payoff matrix,( a) indicate the best strategy for each firm.( b) Why is the entry-deterrent threat by firm A to lower the price credible to B?( c) What could firm A do to make its threat credible without building excess capacity?
Froeb and McCann ' s Chapter 15: a) Individual problems: 15-4 and 15-5.
Individual problem 15-4: The following represents the potential outcomes of your first salary negotiation after graduation: Assuming this is sequential move game with the employer moving first, indicate the most likely outcome. Does the ability to move first give the employer an advantage? If so, how? As the employee, is there anything you could do to realize a higher payoff?
Individual problem 15-5: Every year, management and labor renegotiate a new employment contract by sending the proposals to an