1. In the context of a price competition game between two firms (called firm 1 and...

 

Transcribed Image Text:

1. In the context of a price competition game between two firms (called firm 1 and firm 2), a best response function for firm 1 is.. A) The equilibrium price that firm 1 should set B) A rule that gives the equilibrium price set by firm 1 C) A function that gives a price of firm 1 for any price set by firm 2 D) A rule that returns the profit-maximising choice of price for firm 1 for any price set by firm 2 Questions 2 and 3 refer the following table. Consider the following normal form game : Player A B) 1 + 2p C) 5 - 4g D) 5-4p a b a 3,2 C) Strictly prefer to play a only D) Strictly prefer to play b only 1,1 Player B b 1,1 Let p be the probability that Player A plays a, and q the probability that Player B plays a 2. The expected value of playing b to Player 1 is given by A) 1+ 2q 5,7 3. Suppose that p = 0.8. Then, a rational player 2 will: A) Insufficient information to determine B) Be indifferent between choosing a or choosing b 1. In the context of a price competition game between two firms (called firm 1 and firm 2), a best response function for firm 1 is.. A) The equilibrium price that firm 1 should set B) A rule that gives the equilibrium price set by firm 1 C) A function that gives a price of firm 1 for any price set by firm 2 D) A rule that returns the profit-maximising choice of price for firm 1 for any price set by firm 2 Questions 2 and 3 refer the following table. Consider the following normal form game : Player A B) 1 + 2p C) 5 - 4g D) 5-4p a b a 3,2 C) Strictly prefer to play a only D) Strictly prefer to play b only 1,1 Player B b 1,1 Let p be the probability that Player A plays a, and q the probability that Player B plays a 2. The expected value of playing b to Player 1 is given by A) 1+ 2q 5,7 3. Suppose that p = 0.8. Then, a rational player 2 will: A) Insufficient information to determine B) Be indifferent between choosing a or choosing b

Answer rating: 100% (QA)

Question Step 1 Answer 1 In the context of a price competition game between two firms called firm 1 ... View the full answer