Use the following to answer questions (25) - (27): Two large tech firms, Dapple (D) and...

 

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Use the following to answer questions (25) - (27): Two large tech firms, Dapple (D) and Googley (G), are considering a no peaching scheme. In such a scheme, firms agree not to hire (i.e., poach) employees away from each other. Suppose cach firm has to decide to either poach (P) or not poach (NP) employees away from the other firm, with the outcomes provided in the payoff matrix below: G P NP 0, 50 50, 0 P 10, 10 D NP 30, 30 Note: G's payoffs (in millions of dollars) are listed 1", while D's payoffs (in millions of dollars) are listed 2. (25] The Nash equilibrium for the one-shot game is that both D and Gselect Pas their strategy. A. True В. False [26] Suppose the game is played three times fie, 3 periods), with cach firm adopting a tit-for-tat strategy. Assuming G's discount factor (6) is 0.25, across the three periods what is the most likely present value of G's payoff stream? A. 90 В. 53.125 C. 39.375 D. 13.125 (27] Suppose the game is repeatedly playod an infinite number of times, with each player adopting a trigger strategy. What values of the discount factor would ensure continuous cooperation among the two players? A. 6>0.25 В. 6>0.50 C. 6>0.75 D. 8-0 [28] Currently, an industry is operating at a point where price - 20, quantity = 10, slope of the demand curve = -1, and marginal cost = 20. Accordingly, the degree of competition in this industry, as measured by the conjectural variation, equals A. 0. В. C. I. D. 2. Use the following to answer questions (25) - (27): Two large tech firms, Dapple (D) and Googley (G), are considering a no peaching scheme. In such a scheme, firms agree not to hire (i.e., poach) employees away from each other. Suppose cach firm has to decide to either poach (P) or not poach (NP) employees away from the other firm, with the outcomes provided in the payoff matrix below: G P NP 0, 50 50, 0 P 10, 10 D NP 30, 30 Note: G's payoffs (in millions of dollars) are listed 1", while D's payoffs (in millions of dollars) are listed 2. (25] The Nash equilibrium for the one-shot game is that both D and Gselect Pas their strategy. A. True В. False [26] Suppose the game is played three times fie, 3 periods), with cach firm adopting a tit-for-tat strategy. Assuming G's discount factor (6) is 0.25, across the three periods what is the most likely present value of G's payoff stream? A. 90 В. 53.125 C. 39.375 D. 13.125 (27] Suppose the game is repeatedly playod an infinite number of times, with each player adopting a trigger strategy. What values of the discount factor would ensure continuous cooperation among the two players? A. 6>0.25 В. 6>0.50 C. 6>0.75 D. 8-0 [28] Currently, an industry is operating at a point where price - 20, quantity = 10, slope of the demand curve = -1, and marginal cost = 20. Accordingly, the degree of competition in this industry, as measured by the conjectural variation, equals A. 0. В. C. I. D. 2.

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