Construct the payoff matrix for the game

Assignment Help Microeconomics
Reference no: EM131612334

Question: Soapy Inc. and Suddies Inc., the only soap- powder producers, collude and agree to share the market equally. If neither firm cheats, each makes $1 million. If one firm cheats, it makes $1.5 million, while the complier incurs a loss of $0.5 million. If both cheat, they break even. Neither firm can monitor the other's actions.

a. What are the strategies in this game? Construct the payoff matrix for this game.

b. If the game is played only once what is the equilibrium? Is it a dominant-strategy equilibrium? Explain.

Reference no: EM131612334

Questions Cloud

In-depth historical analysis of an organized crime group : in-depth historical analysis of an organized crime group, Select an organized crime group in the United States
What is value of shareholders equity account for firm : What is the value of the shareholders' equity account for this firm? How much is net working capital?
Explain the function and operation of cisco : Explain the function and operation of Cisco switch and router operating systems and their specific licensing, management, and operational recovery procedures.
Compute the gross margin percentage : You decide first to assess the company's performance in terms of debt management and profitability. compute The gross margin percentage
Construct the payoff matrix for the game : Soapy Inc. and Suddies Inc., the only soap- powder producers, collude and agree to share the market equally. If neither firm cheats, each makes $1 million.
Installing equipment to manufacture instructions : What are the consequences of not installing equipment to manufacture's instructions?
Briefly analyze what the data in each column represents : A detailed description of the data used in this analysis - Briefly analyze what the data in each column represents. A detailed explanation of any information.
Define what are the requirements to vote in alabama now : What happened in 1965 that changed the requirements to vote
Develop a logic circuit in vhdl using quartus : Develop a logic circuit in VHDL using quartus that meet the following requirements:

Reviews

Write a Review

Microeconomics Questions & Answers

  Eyesolutions is the proud creator of eyetab

EyeSolutions is the proud creator of eyeTab, a leading eReader. Market research shows that there are two types of consumers: 2 million avid readers, whose willingness to pay is $350; and 3 million occasional readers, whose willingness to pay is $200...

  Identify who you believe is the victim in the given scenario

Identify who you believe is the victim in this scenario, and explain why you think so. Select three theories of victimization and explain the origins of the crime and victimization from the perspective of each of the three selected theories.

  Determine the possible circumstances under

Analyze the major short run and long cost functions for the low-calorie, frozen microwaveable food company given the cost functions - improve its profitability and deliver more value to its stakeholders.

  What is the relative role of the public sectors

How does the Global Competitiveness Index (GCI) seek to measure the competiveness of nations? What is the relative role of the public versus the private sectors in this measurement? Discuss

  How do developing and industrial countries differ

Policy makers disagree on the benefits and disadvantages of the interactions between developed nations and developing nations. Some say that developed nations.

  There are increasing returns to scale in production

The firm can vary the amounts of two basic chemicals in producing a specialty chemical, but, for quality control reasons, the relative proportions of chemicals must be between 40/60 and 60/40.

  What would you conclude from these results

Much has been made of the concept of experimenter bias, which refers to the fact that for even the most conscientious experimenters there seems to be a tendency for the data to come out in the desired direction. Suppose we use students as experime..

  Describe the three types of unemployment

Describe the three types of unemployment. What types of government programs would be most effective in combating each type of unemployment?

  New good or service business proposal selectnbspa new good

new good or service business proposal selectnbspa new good or service for an existing business or a business that you

  The after-tax investment value of the machine

A corporation purchased a machine for $60,000 five years ago. It had an estimated life of ten years and an estimated salvage value of $9,000. The current book value of this machine is $5,000. If the current market value is $22,500 and the effective i..

  What are the limits to the u.s. long-term economic growth

What are the limits to the U.S. long-term economic growth? Is there anything that our government can do to address these limits, or would it be a bad idea to try?

  Describe the gravity equation in detail

Describe the sources of gains from trade for the consumer in the monopolistic competition model with differentiated products. Hint: there are two mechanisms at work.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd