You are working for a new company called Hairy Tree (HT), they have one competitor named...

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You are working for a new company called Hairy Tree (HT), they have one competitor named Big Birdy (BB). Both firms have strategies L, M, and H. The payoffs for each firm are given in the payoff matrix below HT L M H L 5,6 9,4 5,5 BB M 6,7 9,7 6,3 H 6,8 1,4 1,4 1. Find out if there are any equilibrium in dominant strategies using the appropriate methodology. (15 marks) 2. Indicate if there are any Nash equilibrium in pure strategies. If any, show that they are Nash equilibrium in pure strategies. (15 marks) 3. Is there any Nash equilibrium in mixed strategies? If there are, show which one using the appropriate methodology and indicate all steps and justify them. (15 marks) You are working for a new company called Hairy Tree (HT), they have one competitor named Big Birdy (BB). Both firms have strategies L, M, and H. The payoffs for each firm are given in the payoff matrix below HT L M H L 5,6 9,4 5,5 BB M 6,7 9,7 6,3 H 6,8 1,4 1,4 1. Find out if there are any equilibrium in dominant strategies using the appropriate methodology. (15 marks) 2. Indicate if there are any Nash equilibrium in pure strategies. If any, show that they are Nash equilibrium in pure strategies. (15 marks) 3. Is there any Nash equilibrium in mixed strategies? If there are, show which one using the appropriate methodology and indicate all steps and justify them. (15 marks)

Answer rating: 100% (QA)

1 Yes there is an equilibrium in dominant strategies HTs dominant strategy is H and BBs dominant strategy is M Thus the equilibrium is H M The payoff for HT is 6 and the payoff for BB is 7 This can be ... View the full answer