BUSI 620 MENTOR It's Your Life/busi620mentor.com BUSI 620 MENTOR It's Your Life/busi620mentor.com | Page 32
a) Discussion Questions: 12 and 13. 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-fortat 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 entrydeterrent 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) Discussion Questions: 12 and 13. 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-fortat 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 entrydeterrent 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?