Question
In: Economics
1.) Consider the discrete Bertrand game described in the Oligopoly lecture notes/video. According to the rules...
1.) Consider the discrete Bertrand game described in the Oligopoly lecture notes/video. According to the rules of this game each student selects a number from the set {0,1,2, 3, 4, 5, 6, 7, 8, 9, 10} and is randomly matched with another student. Whoever has the lowest number wins that amount in dollars and whoever has the high number wins zero. In the event of ties, each student receives half their number in dollars. What number would you select if you played this game in our online class? Explain your reasoning.
2.) Continue to consider this discrete Bertrand model, but now assume that each student has a constant cost of 5 that is deducted from all payoffs. So whoever has the low number wins their number, minus 5. Whoever has the high number loses 5 total. In the event of a tie, each student wins an amount equal to their number divided by two, then minus five. Find any Nash equilibria in this game. Explain your reasoning. Hint: It is perfectly fine for both players to have losses in equilibrium! There are more than 1 Nash equilibria.
Solutions
Rahul Sunny answered 2 years agoRelated Solutions
1.) Consider the discrete Bertrand game described in the Oligopoly lecture notes/video. According to the rules...
1.) Consider the discrete Bertrand game described in the
Oligopoly lecture notes/video. According to the rules of this game
each student selects a number from the set {0,1,2, 3, 4, 5, 6, 7,
8, 9, 10} and is randomly matched with another student. Whoever has
the lowest number wins that amount in dollars and whoever has the
high number wins zero. In the event of ties, each student receives
half their number in dollars. What number would you select if...
Consider the discrete Bertrand game. According to the rules of this game each student selects a...
Consider the discrete Bertrand game. According to the rules of
this game each student selects a number from the set {0,1,2, 3, 4,
5, 6, 7, 8, 9, 10} and is randomly matched with another student.
Whoever has the lowest number wins that amount in dollars and
whoever has the high number wins zero. In the event of ties, each
student receives half their number in dollars. What number would
you select if you played this game? Explain your reasoning.
Consider this discrete Bertrand model, but assume that each student has a constant cost of 5...
Consider this discrete Bertrand model, but assume that each
student has a constant cost of 5 that is deducted from all payoffs.
So whoever has the low number wins their number, minus 5. Whoever
has the high number loses 5 total. In the event of a tie, each
student wins an amount equal to their number divided by two, then
minus five. Find any Nash equilibria in this game. Explain your
reasoning. Hint: It is perfectly fine for both players...
As in Example 2.20 of the 01-29 version of the lecture notes, consider the Markov chain...
As in Example 2.20 of the 01-29 version of the lecture notes,
consider the Markov chain with state space S = {0, 1} and
transition probability matrix P = " 1 2 1 2 0 1# . (a) Let µ be an
initial distribution. Calculate the probability Pµ(X1 = 0, X7 = 1).
(Your answer will depend on µ.) (b) Define the function f : S → R
by f(0) = 2, f(1) = 1. Let the initial distribution of...
In an arcade video game, a spot is programmed to move across the screen according to...
In an arcade video game, a spot is programmed to move across the
screen according to x = 10.3t -
0.692t3, where x is the distance in
centimeters measured from the left edge of the screen and
t is time in seconds. When the spot reaches a screen edge,
either at x = 0 or x = 18.0 cm, t is
reset to 0 and the spot starts moving again according to
x(t). (a) At what time after
starting is...
1. According to the model of Bertrand price competition, competing firms will set prices according to...
1. According to the model of Bertrand price competition,
competing firms will set prices according to which rule:
marginal revenue equal marginal cost
marginal revenue equal to average cost
price equal to marginal revenue
price equal to marginal cost
price equal to average cost
2.
There are 2 firms that sell a certain software, Microsoft and
Oracle. Microsoft invented the software and so they act as a market
leader by first deciding how much of the software they are going...
Consider the Cournot competition example in the lecture notes. Inverse demand function is P(Q) = 31...
Consider the Cournot competition example in the lecture notes.
Inverse demand function is P(Q) = 31 ? 2Q. However, make the change
that firm B’s cost function is CB(Q) = 2Q. Firm A’s cost function
remains the same at CA(Q) = Q.
a) Determine firm A’s best response function Q*A (QB).
b) Determine firm B’s best response function Q*B (QA).
c) How much quantity is each firm producing in the Cournot
d) What is the price at which output goods...
Q2. Consider a Bertrand game with differentiated products in which two firms simul- taneously choose prices....
Q2. Consider a Bertrand game with differentiated products in
which two firms simul- taneously choose prices. The marginal cost
for each firm is zero and there are no fixed costs. The demand
functions for each firm are:
Q1 = 80 − 2P1 + 2P2,
Q2 = 80 − 2P2 + 2P1.
where P1 is the price set by firm 1, P2 is the price set by firm
2, Q1 is the quantity demanded of firm 1’s product and Q2 is...
Consider how the economic machine works (as described in the Dalio video). a) Assume the economy...
Consider how the economic machine works (as described in the
Dalio video).
a) Assume the economy appeared to be slipping into recession and
jobs were starting to be lost, what action would you expect the Fed
to take?
b) What outcome are they trying to achieve?
c) Assuming their action was not having the desired effect
(because we had reached the end of the long-term debt cycle), what
steps would need to be taken?
Rule Based System 1. Given the rule following rules from the class notes on production rules...
Rule Based System
1. Given the rule following rules from the class notes on
production rules to convert an Arabic number less than 40 to a
roman numeral. USING LOGIC
Rule 1: if x is null then prompt the user and read x
Rule 2: if x is higher than 999 then print “too Big” and make x
null
Rule 3: if x is between 10 and 39 then print “X” and reduce x by
10
Rule 4: if x...
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