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The game known as the battle of the Bismarck Sea (named for that part of the southwestern Pacific Ocean separating the Bisma rck Arch ipelago from Papua-New Guinea) summarizes a well-known game actually played in a naval engagement between the United States and Japan in World War II. In 1943, a Japanese admiral was ordered to move a convoy of ships to New Guinea; he had to choose between a rainy northern route and a sunnier southern rou te, both of which required 3 days sailing time. The Americans knew that the convoy would sail and wanted to send bombers after it, but they did not know which route it would take. The Americans had to send re connaissance planes to scout for the convoy, but they had only enough re connaissance planes to explore one route at a time. Both the Japanese and the Americans had to make their decisions with no knowledge of the plans being made by the other side.
If the convoy was on the route explored by the Americans first, they could send bombers right away; if not, they lost a day of bombing. Poor weather on the northern route would also hamper bombing. If the Americans explored the northern route and found the Japanese right away, they could expect only 2 (of 3) good bombing days; if they explored the northern route and found that the Japanese had gone south, they could also expect 2 days of bombing. If the Americans chose to explore the southern route first, they could expect 3 full days of bombing if they found the Japanese right away but only 1 day of bom bing if they found that the Japanese had gone north.
(a) Illustrate this game in a game ta ble.
(b) Identify any dominant strategies in the game and solve for the Nash equilibrium.
Player 1 has the following set of strategies {A1;A2;A3;A4}; player 2’s set of strategies are {B1;B2;B3;B4}. Use the best-response approach to find all Nash equilibria.
A supplier and a buyer, who are both risk neutral, play the following game, The buyer’s payoff is q^'-s^', and the supplier’s payoff is s^'-C(q^'), where C() is a strictly convex cost function with C(0)=C’(0)=0. These payoffs are commonly known.
Pertaining to the matrix need simple and short answers, Find (a) the strategies of the firm (b) where will the firm end up in the matrix equilibrium (c) whether the firm face the prisoner’s dilemma.
Consider the two-period repeated game in which this stage game is played twice and the repeated-game payos are simply the sum of the payos in each of the two periods.
Two players, Ben and Diana, can choose strategy X or Y. If both Ben and Diana choose strategy X, every earns a payoff of $1000.
The market for olive oil in new York City is controlled by 2-families, Sopranos and Contraltos. Both families will ruthlessly eliminate any other family that attempts to enter New York City olive oil market.
Following is a payoff matrix for Intel and AMD. In each cell, 1st number refers to AMD's profit, while second is Intel's.
Determine the solution to the given advertising decision game between Coke and Pepsi, assuming the companies act independently.
Little Kona is a small coffee corporation that is planning entering a market dominated through Big Brew. Each corporation's profit depends on whether Little Kona enters and whether Big Brew sets a high price or a low price.
Suppose you and your classmate are assigned a project on which you will earn one combined grade. You each wish to receive a good grade, but you also want to avoid hard work.
Consider trade relations in the United State and Mexico. Suppose that leaders of two countries believe the payoffs to alternative trade policies are as follows:
Use the given payoff matrix for a simultaneous move one shot game to answer the accompanying questions.
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