Escolar Documentos
Profissional Documentos
Cultura Documentos
Games of Mixed Strategies. In a mixed strategy, each player randomly selects their actions
with given probabilities that maximize its expected payoff given the randomly selected strategy
being played by its opponent. But the most important thing is that once the equilibrium is
obtained, both players are indifferent between playing their equilibrium strategy and any other
strategy.
Lastly is the Sequential Games. Also known as dynamic game, it is presented by game trees.
The game tree represents the game known as extensive form of a game. Because the next
players know the move made by the opponent, this game is practicing the perfect information.
Question 2
Ben has the choice either to stay out or enter as he is the first mover. Given Bens move, Jerry
can select either to be aggressive if entry or maintain the current price if Ben stay out in order to
maximize the profit. There is no equilibrium occur in this situation because the only choice occur
will make one of them either better off or worse off. Therefore in order to maintain the profit,
Jerry should do whatever it takes to make sure that Ben stay out while maintaining the current
price.
Question 4
The combined profits are vary from cell to cell from the minimum profit of RM6000 to maximum
profit of RM8000. The movie theater both have the same dominant strategy which is offers 2-for1 deal. The Nash equilibrium occur at lower right where both of the theaters practicing 2-for-1deal.
It is the prisoners dilemma game as the prisoner's dilemma is set up in such a way that both
parties choose to protect themselves at the expense of the other participant. As a result
both participants find themselves in a worse state than if they had cooperated with each
other in the decision-making process.
Question 8
The Betsys husband advise is good because there is the 50 percent chance for Betty to get the
$100,000 if she trade. But if she keep the $1000 then she does not have the 50 percent chance.
Question 10
Saudi Arabia
High Price
Low Price
High Price
100,100
140,25
Low Price
25,140
80,80
Venezuela
The combined profits are vary from cell to cell from the minimum profit of RM160 millions to
maximum profit of RM200 millions. Both of the countries have the same dominant strategy
which is offers low price of oil. The Nash equilibrium occur at lower right where both of the
countries practicing low price of oil.
It is the prisoners dilemma game as the prisoner's dilemma is set up in such a way that both
parties choose to protect themselves at the expense of the other participant. As a result both
participants find themselves in a worse state than if they had cooperated with each other in the
decision-making process.
Question 12
a) Pepsi does not have dominant strategy
b) Coke does not have dominant strategy
c) Coke need to develop new product 50 percent of the time and at the same time does not
develop new product 50 percent of the time. while Pepsi need to advertise heavily 50
percent of the time and also lowers price 50 percent of the time.
1200=1600800 u
40=800 u
u=1/2
u=1/2
INDUSTRIAL ECONOMY
ECO 645
Name
Class
: BM250 5N
Matric No.
: 2014426538