Decides to adopt either technology

Assignment Help Business Economics

Reference no: EM131091524

Consider the following sequential game between firm 1 and firm 2. First, firm 1 decides to adopt either technology A or technology B. Firm 2 observes firm 1's decision and then also decides between technology A or technology B. The profits (in thousands of dollars) of the firms are as follows. If both adopt technology A, then firm 1's payoff is $100 and firm 2's is $40. If firm 1 adopts technology A and firm 2 adopts technology B, then the payoff of each firm is $50. If firm 1 adopts technology B and firm 2 adopts technology A, firm 1's payoff is $60 and firm 2's is $100. Finally, if both adopt technology B, then each firm makes $25 in profits. Using the principle `look ahead and reason back' (i.e., backward induction), the most reasonable prediction is

Reference no: EM131091524

Questions Cloud

Price discriminates then the profit maximizing prices : The Snow City Ski Resort caters to both out-of-town skiers and local skiers. The demand for ski tickets of out-of-town skiers is given by Qo = 600 - 10 Po, while the demand for ski tickets of local skiers is given by Ql = 400 - 20 Pl . The marginal c..

Explain two phases of the business cycle : Explain two phases of the business cycle. Discuss the business cycle indicators. Explain why do changes in total spending cause the level of GDP to change? How does GDP gap relate to the actual GDP in a particular period?

How many bits required to represent the greek alphabet : Describe Two Methods to determine if two distinct circuits are equivalent? The Greek alphabet has 25 symbols. How many bits would be required to represent the Greek alphabet

Is this vertical maximum higher : What will be his highest elevation? If his jump angle is increased to 30deg, will he stay in the air longer? Is his horizontal jump longer? Is this vertical maximum higher?

Decides to adopt either technology : Consider the following sequential game between firm 1 and firm 2. First, firm 1 decides to adopt either technology A or technology B. Firm 2 observes firm 1's decision and then also decides between technology A or technology B. If both adopt technolo..

Final literature review for the dissertation : In this stage of the Proposal, you will explore how your work fits existing published work, by reviewing literature on your research topic. While gathering sources for your review, keep in mind that your final literature review for the dissertatio..

Standard deviation of the time between returns : 1. A company has reviewed their sales figures and finds that an average of 3 of their bestselling televisions are returned each month because they are not working properly and according to the warranty must be replaced.

Based on a convincing economic analysis : Considering the weather data, typical heating loads, and the price of natural gas in your area, make a recommendation to your neighbor based on a convincing economic analysis.

What are the net proceeds from the sale of equipment : A company bought a piece of equipment for $250,000. The equipment has a useful life of 10 years. The company is using the seven-year MACRS property class to depreciate the asset for tax purposes. At the end of year 4, the company sold the equipment f..

User Account

All Pages