Consider two competing firms that each have the choice between charging a low price and a...

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Consider two competing firms that each have the choice between charging a low price and a high price. Firm B Low price High price Firm A Low 8,8 10,0 price High 0, 10 6,6 price Payoffs profits (firm A, firm B) a) Find all best responses and the Nash equilibrium of this game. Make sure to clearly state what the Nash equilibrium is. b) Is this game a Prisoner's Dilemma? Why (not)? In this question, you play the following game against your classmates: You get to request either 2 or 4 bonus points for this homework. We will determine the average number of bonus points requested across the class. If the average is less than 3, everyone will receive the number of bonus points requested. If the average greater than 3, everyone who has answered the question will receive of the requested bonus points (i.e., either or 1 point). a) How many bonus points do you request (2 or 4)? b) Explain the reasons for your choice in part a. (The score for this question will not depend on the average requested bonus points.) Consider two competing firms that each have the choice between charging a low price and a high price. Firm B Low price High price Firm A Low 8,8 10,0 price High 0, 10 6,6 price Payoffs profits (firm A, firm B) a) Find all best responses and the Nash equilibrium of this game. Make sure to clearly state what the Nash equilibrium is. b) Is this game a Prisoner's Dilemma? Why (not)? In this question, you play the following game against your classmates: You get to request either 2 or 4 bonus points for this homework. We will determine the average number of bonus points requested across the class. If the average is less than 3, everyone will receive the number of bonus points requested. If the average greater than 3, everyone who has answered the question will receive of the requested bonus points (i.e., either or 1 point). a) How many bonus points do you request (2 or 4)? b) Explain the reasons for your choice in part a. (The score for this question will not depend on the average requested bonus points.)

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a Find all best responses and the Nash equilibrium of this game Best responses If Firm A charges hig... View the full answer