5. (Games w/o conflict) Give an example of a two player strategic game where each player...

5. (Games w/o conflict) Give an example of a two player strategic game where each player has two actions and have identical preferences over outcomes, so that there is no conflict between their interests.

a. Represent the game in normal form (bimatrix).

b. Support with link to news article, pictures, or similar.

Expert Solution

		Player A
		Product M	Product L
Player B	Product L	(4,4)	(4,5)
Player B	Product M	(5,4)	(8,8)

In above game there are two countries, A and B which have competitive advantage in products L and M. Country A has competitive advantage in producing commodity L whereas Country B has competitive advantage in producing commodity M.

CASE-1-Now if player A (country A) chooses to produce commodity M and player B(Country B) also decides to produce commodity L. What happens both have to bear extra cost because of lack of expertise in others expertise areas.

CASE-2- Now if player A (country A) chooses to produce commodity L and player B(Country B) also decides to produce commodity L. What happens that because of extra burden of cost, player B could earn 4 units profit and A could earn only 5 units of profits because player B captures certain market share.

.CASE-3- Now if player A (country A) chooses to produce commodity M and player B(Country B) also decides to produce commodity M. What happens that because of extra cost, player A could earn 4 units of profit and, player B could earn only 5 units of profits. This happens because A captures certain market share.

.CASE-4- Now if player A (country A) chooses to produce commodity L and player B(Country B) also decides to produce commodity M. What happens that because of expertise and monopoly status in the market of commodity L, player A earns 8 units of profit. And, player B also earns 8 units of profits for the similar reasons.

In such game there is only one Nash equilibrium.

Rahul Sunny answered 8 months ago

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5. (Games w/o conflict) Give an example of a two player strategic game where each player...

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