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Olin [163]
3 years ago
13

Game Theory and Strategic Choices -- End of Chapter Problem You have developed a new computer operating system and are consideri

ng whether you should enter the market and compete with Microsoft. Microsoft has the option of offering their operating system for a high price or a low price. Once Microsoft selects a price, you will decide whether you want to enter the market or not enter the market. If Microsoft charges a high price and you enter, Microsoft will earn $30 million and you will earn $10 million. If Microsoft charges a high price and you do not enter, Microsoft will earn $60 million and you will earn $0. If Microsoft charges a low price and you enter, Microsoft will earn $20 million and you will lose $5 million. If Microsoft charges a low price and you do not enter, Microsoft will earn $50 million and you will earn $0. Construct a payoff table and find the Nash equilibrium if you and Microsoft both make your decisions simultaneously.
In a simultaneous move game, Microsoft will and you will:___________
Business
1 answer:
pentagon [3]3 years ago
3 0

Answer:

Microsoft will choses High price and you will choose to enter the market .

Explanation:

The Nash equilibrium

                                                          <u>  You </u>

<u>                                                 enter                     Don't enter</u>

Microsoft  high price          ( $30 , $10 )              ( $60 , $0 )

Microsoft  low price            ( $20, -$5 )               ( $50, $0 )

From the Nash equilibrium the best time for you to enter the market is when Microsoft Charges a high price

While the best time for Microsoft is when it charges a high price and you do not enter the market

But considering Simultaneous Move game : Microsoft will choses High price and you will choose to enter the market .

You might be interested in
Which of the following is an example of a strategic action?
Pavlova-9 [17]

Answer:

Option D. Entry into the European market by Home Depot.

Explanation:

The reason is that the strategic actions are long term actions and are market based moves which bounds the organizational resources for implementation and are also very difficult to reverse.

So here use of coupons, fare increases and two for one offers are easily reversible, requires fewer organizations resources for implementation and short term decisions which means these are tactical actions.

Whereas the decision to enter european market by Home Depot is long term decision, bounds organization resources for implementation and is very difficult to implement or reverse the actions once taken, so it is strategical action of Home Depot.

8 0
3 years ago
Fowler is expected to pay a dividend of $1.81 one year from today and $1.96 two years from today. The company has a dividend pay
Mekhanik [1.2K]

Answer:

$77.34

Explanation:

The computation of the current stock price is shown below:

But before that following calculations need to be done

EPS for year 2 = Dividend at year 2 ÷ Payout Ratio

= $1.96 ÷  0.40

= $4.90

Now  the price at year 2 is

Price at year 2 ÷ EPS at year 2 = PE ratio

Price at year 2 ÷ $4.90 = 18.95

Price at year 2 = $92.855

Now finally the current stock price is

= Dividend at year 1  ÷ (1 + rate of interest) + Dividend at year 2 ÷ (1 + rate of interest)^2 + Price at year 2 ÷ (1 + rate of interest)^2

= $1.81 ÷ 1.119 + $1.96 ÷ 1.119^2 + $92.855 ÷ 1.119^2

= $77.34

6 0
2 years ago
When considering barriers to international communication, companies should be aware that noise tends to increase the probability
Kitty [74]
True, I believe so if not then correct me.
4 0
3 years ago
Journal EntryThe company has an unadjusted debit balance in Accounts Receivable of $25,000 and an unadjusted credit balance of $
Mkey [24]

Answer:

Sales Discounts 190 debit

   Allowance for Sales Discounts  190 credit

Explanation:

From the current accounts receivable, the company has 10,000 within discount period and t expect the customer will take them so:

10,000 x 2% = 200 expected discount

currenly the accouting balance for the expected discount is 10 so:

200 - 10 = 190 allowance for sales discounts adjustment.

Remember we do this adjustment to match the expenses or discount withthe period they are generated. Not doing so, will imput discount to the next period for transaction which occurs in the current one.

3 0
3 years ago
Splish Company provides the following information about its defined benefit pension plan for the year 2017. Service cost $110,00
kipiarov [429]

Answer: $155,520

Explanation:

Pension Expense = Service Cost - Expected return on plan assets + Prior service cost amortization + Interest cost

Interest Cost

= Interest rate * Projected benefit obligation

= 0.09 * 728,000

= $65,520

Pension Expense = 110,000 - 30,000 + 10,000 + 65,520

= $155,520

3 0
3 years ago
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