Draw the three diagram for this game with related payoffs

Reference no: EM132463770

Problem: Consider the rivalry between Toyota, Honda and Nissan to develop a new fuel efficient eco-car. Suppose Toyota is ahead in the development process and Honda and then Nissan are considering whether to enter the eco-car competition. If Honda and Nissan stays out, they earn a zero profit, whereas Toyota enjoys a monopoly and earns $100 billion. If Honda and Nissan decide to enter and develop the eco-car, then Toyota has to decide whether to accommodate Honda and Nissan peaceably or to wage a price war. In the event of peaceful competition between the three, each will make a profit of £30 billion, and if there is a price war between the three, each firm will lose $5 billion. If only one enters, then the payoff for peaceful competition will be $40 billion for each, a loss of $7 billion in a price war and zero profit for the firm that stays out.

a) Draw the three diagram for this game with related payoffs.

b) List down each firms complete pure strategies.

c) Find the Nash equilibrium and describe each firms' optimal strategies.

Reference no: EM132463770

Questions Cloud

What is the expected value for the percent of all us adults : What is the expected value for the percent of all US adults who would say they approve of lowering the drinking age to 18, if the states felt

Determine statements about internal control : Determine statements about internal control. discuss Everyone within an organization has some internal control responsibilities.

What if your child education and the teacher assigned : Why or why not? What if your child's education and the teacher assigned to him/her would be successful 95 out of 100 times?

Determine the issue price for the bonds : Prepare the journal entry to record the first semi Annual interest payment, assuming straight line amortization.Determine the issue price for the bonds

Draw the three diagram for this game with related payoffs : a) Draw the three diagram for this game with related payoffs. b) List down each firms complete pure strategies.

Calculate the cut-off height that ensures only people : Calculate the cut-off height (C) that ensures only people within the top 2.5% height bracket are allowed into the team. Give your answer in inches to the neares

Prepare record depreciation of the machine at december : Straight-line depreciation is used on December 31. At the end if it's fifth year in operation, it is disposed of. Record depreciation of the machine at December

Calculate the test score above which 25% of all test scores : Calculate the test score above which 25% of all test scores lie. Give your answer to 1 decimal place.

Choose a data set from the r package glmsdata : Choose a data set from the R package GLMsData. Choose a proper generalised linear model to model the data. Discuss the reason.

User Account

All Pages