Consider the following simultaneous-move game and answer the following questions Firm B L R U (10,...

 

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Consider the following simultaneous-move game and answer the following questions Firm B L R U (10, 20) (60, 10) Firm A D (0, 50) (40, 30) i) How many Nash equilibria does that above game have and why? (2 marks) Suppose that the simultaneous-move game above is played repeatedly. In each period, the probability that the game will continue to the next period is 0.8. Firm A's discount value per period is 0.6. Firm B's discount value per period is 0.9. In a Subgame Perfect equilibrium, will the firms form a cartel to get higher payoffs than when the game is played only once? Discuss in details (10 marks) Consider the following simultaneous-move game and answer the following questions Firm B L R U (10, 20) (60, 10) Firm A D (0, 50) (40, 30) i) How many Nash equilibria does that above game have and why? (2 marks) Suppose that the simultaneous-move game above is played repeatedly. In each period, the probability that the game will continue to the next period is 0.8. Firm A's discount value per period is 0.6. Firm B's discount value per period is 0.9. In a Subgame Perfect equilibrium, will the firms form a cartel to get higher payoffs than when the game is played only once? Discuss in details (10 marks)

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i Nash equilibrium is a situation where a firm is playing its best strategy given what the opponent ... View the full answer