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eduard
3 years ago
7

Solving for dominant strategies and the Nash equilibrium Suppose Nick and Rosa are playing a game in which both must simultaneou

sly choose the action Left or Right. The payoff matrix that follows shows the payoff each person will earn as a function of both of their choices. For example, the lower-right cell shows that if Nick chooses Right and Rosa chooses Right, Nick will receive a payoff of 7 and Rosa will receive a payoff of 6.
Rosa
Left Right
Nick Left 8,4 4,5
Right 5,4 6,5

The only dominant strategy in this game is for _____ to choose _____ . The outcome reflecting the unique Nash equilibrium in this game is as follows: Nick chooses _____ and Rosa chooses _____ .

Business
1 answer:
slava [35]3 years ago
8 0

Answer:

The only dominant strategy in this game is for <u>NICK</u> to choose <u>RIGHT</u>. The outcome reflecting the unique Nash equilibrium in this game is as follows: Nick chooses <u>RIGHT</u> and Rosa chooses <u>RIGHT</u>.

Explanation:

                                                  ROSA

                                     left                          right

                                    4 /                            6 /

                left                  3                              4

NICK                                                      

               right             6 /                             7 /

                                       7                               6

Rosa does not have a dominant strategy since both expected payoffs are equal:

  • if she chooses left, her expected payoff = 3 + 7 = 10
  • if she chooses right, her expected payoff = 4 + 6 = 10

Nick has a dominant strategy, if he chooses right, his expected payoff will be higher:

  • if he chooses left, his expected payoff = 4 +6 = 10
  • if he chooses right, his expected payoff = 6 + 7 = 13

The only possible Nash equilibrium exists if both Rosa and Nick choose right, so that their strategies are the same, resulting in Rosa earning 6 and Nick 7.

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Which of the following best describes equilibrium?
QveST [7]

Answer:

C. A situation where no economic agent would benefit by changing his or her behavior

Explanation:

An economic equilibrium is when the agents are optimizing their decisions and opposing market forces are equal. This point allows the economic agents to maximize their utility and any change from this point will cause all agents to move away from potential maximum benefits.

In a natural equilibrium there is usually no government intervention so option A is false. Option B gives only one agent potential benefits and as such there is no equilibrium. Option D is conditional and may or may not happen as when the agents find missing information they would optimize again and move to an equilibrium.

Hope that helps.

3 0
3 years ago
Natural gas is often priced in units of dollars per therm. One therm equals 100,000 BTUs . A certain family uses 600 therms of e
ololo11 [35]

Answer:

-$28.8.

Explanation:

Note, we were told,

  • to assume the cost of a therm is $0.30
  • the family uses 600 therms of energy annually.

<u>Savings on old furnace:</u>

  • 600 * $0.30 * 0.80 (or written as 80%) = $144

<u>Savings on new furnace:</u>

  • 600 * $0.30 * 0.96 (or written as 96%) = $172.8

Difference: $144 - $172.8 = -$28.8.

7 0
2 years ago
FarCry Industries, a maker of telecommunications equipment, has 26 million shares of common stock outstanding, 1 million shares
Margaret [11]

Answer:

wP = 114.5 / 514.6   = 0.2225 or 22.25%

Explanation:

The WACC or weighted average cost of capital is the cost of a firm's capital structure. The capital structure of a firm can be made up of one or more of the following components namely debt, preferred stock and common equity. The WACC is normally calculated using the market value of these components. The formula for WACC is,

WACC = wD * rD * (1-tax rate)  +  wP * rP  +  wE * rE

Where,

  • wD, wP and wE represents the weight of debt, preferred stock and common equity in the capital structure based on the market value
  • rD, rP and rE are the cost of debt, preferred stock and common equity respectively.

To calculate the weight that should be assigned to the preferred stock in the calculation of WACC, we need to determine the market value of preferred stock and the market value of the capital structure.

Market Value - Debt = 10000 * 1000 * 1.01  =  $10.1 million

Market Value - Preferred stock = 1 * 114.50  = $114.5 million

Market Value - Common equity = 26 * 15  =  $390 million

Total MV of capital structure = 10.1 + 114.5 + 390  = $514.6

wP = 114.5 / 514.6   = 0.2225 or 22.25%

3 0
3 years ago
Interview any adult you know about their job. Ask the person questions related to the job. You should find out whether the perso
Llana [10]

Answer:

My Answer: Why did you choose to work here? How do you feel about the organization here? What are you likes about the company? Why are working in the same organization? Would you recommend the organization for future employees?

Explanation:

Plato's Answer: I interviewed my aunt, who works at Triple J Productions. She has been working there for 20 years. When she started out, the company offered voluntary monthly trainings for employees looking to advance. The company had a family picnic every summer for employees and their families. The company was very honest, cared about its employees, customers, etc. Three years ago, the CEO passed away. His son took over the company. Now, they do not have any company picnics. Training has stopped and the company often outsources jobs to employees who will work for low salaries. She is now quite unhappy at the company, but feels that she has invested too much time in it to go somewhere else. Ten years ago, she would have said it is a great place to work. Today, she feels that the company's common practices are sneaky and underhanded and their main motivation is money.

I hope it helps!

3 0
2 years ago
Marketing is a subset of advertising.<br><br> True<br> False
andreev551 [17]

Answer:

False

Explanation:

Marketing is not a subset of advertising. In fact it is the opposite, advertising is the subset of marketing.

Advertising is mostly focused on acquiring customers and promoting sales. Generally, advertising is based on formulating campaigns to promote the products and increasing sales. These promotions are carefully planned out and well designed so they reach a target audience with the help of media such as radio, newspaper, television and magazines etc.

4 0
3 years ago
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