Reference no: EM136596
Q. The owner of a new restaurant is planning to advertise to attract customers. In the Bayesian game, Nature determines the restaurant's quality, which is either high or low. Assume that each quality occurs with equal probability. After the owner learns about quality, he decides how much to advertise. Let A denote the amount of advertising expenditure. For simplicity, assume that there is a single consumer. The consumer observes how much advertising is conducted, updates her beliefs about the quality of the restaurant, and then decides whether or not to go to the restaurant. (One can imagine that A is observed by noticing how many commercial spots are on local television and how many ads are in the newspaper and on billboards.) Assume that the price of a meal is fixed at $50. The value of a high-quality meal to a consumer is $85 and of a low-quality meal is $30. A consumer who goes to the restaurant and finds out that the food is of low quality ends up with a payoff of 20 which is the value of a low-quality meal, 30, less the price paid, 50. If the food is of high quality, then the consumer receives a value of 35 Furthermore, upon learning of the high quality, a consumer anticipates going to the restaurant a second time. Thus, the payoff to a consumer from visiting a high-quality restaurant is actually 70
For the restaurant owner, assume that the cost of providing a meal is 35 whether it is of low or high quality. If the restaurant is of high quality, the consumer goes to the restaurant, and the restaurant spends A in advertising, then its profit (and payoff) is If the restaurant is of low quality, the consumer goes to the restaurant, and the restaurant spends A in advertising, then its profit is These payoffs are summarized in the following table. If the consumer does not go to the restaurant, then her payoff is zero and the owner's payoff is A.
a. Find a separating perfect Bayes-Nash equilibrium.
b. At a separating perfect Bayes-Nash equilibrium, what is the maximum amount of advertising that a restaurant conducts? What is the minimum amount?
|
Indifference curve for each consumer
: Using an Edge worth Box, graph the initial allocation and draw the indifference curve for each consumer that runs through the initial allocation.
|
|
Describe why the patient stopped breathing
: Clarify the effects of the ecb infestation you used. Were all corn varieties evenly effective at controlling the ecb? How do you know.
|
|
Major rating agencies
: Given your understanding of bond markets, what signals is the the bond market sending in response to the downgrade. Is this problematic.
|
|
Show the concept of perceptual set
: After one minute, ask your subjects to close their eyes. Once their eyes are closed, ask them to recite everything in the room that is different colour than the one they were looking for, for in case, anything and everything that is green.
|
|
Amount of advertising that a restaurant conducts
: At a separating perfect Bayes-Nash equilibrium, what is the maximum amount of advertising that a restaurant conducts. What is the minimum amount.
|
|
Give the age group and gender of the individuals
: What are the genotypes of parent orange-fruited plants. Within the two groups defined by bone mass smaller skeletons have bones with evidence of epiphyseal plates should be. Give the age group and gender of the individuals in this fine.
|
|
Elucidate relationship among production curves
: Elucidate relationship among production curves average product and marginal product also cost curves average variable cost, average total cost and marginal cost.
|
|
What were genotypes of the parents
: Using this information, what two strategies can you use to isolate the giraffe's gene from its genomic library. If only females are found to be black, what were genotypes of the parents.
|
|
What is the prescribed treatment
: Make the statement that there is an equal number of all four bases (A, T, C, G) and that the sequence of bases is random, how often will a single operator be expected to appear by chance. What factors or clues lead you to this diagnosis.
|