question archive 8) Each of three players is deciding between the pure strategies go and stop
8) Each of three players is deciding between the pure strategies go and stop
Subject:EconomicsPrice: Bought3
8) Each of three players is deciding between the pure strategies go and stop. The payoff to go is 120/m where m is the number of players that choose go, and the payoff to stop is 55 (which is received regardless of what the other players do). Find all Nash equilibria in mixed strategies.
9. A factory is suspected of producing drugs illegally. The authority is deciding whether to conduct an inspection. If the factory produces drugs and an inspection takes place, the drugs will be discovered. The cost of an inspection to the government is 100. The benefit from the inspection is 500 if drugs are found, but 0 if none are found. The payoff to the authority from conducting an inspection is the benefit minus the cost, while the payoff from not inspecting is 0. For the factory, the payoff from producing drugs and not being caught is 200, from not producing drugs is 0, and from producing drugs and being caught is -300. A factory must decide whether or not to produce drugs, and the government must decide whether or not to conduct an inspection. Find all mixed strategy Nash Equilibrium.
10. A total of n ≥ 2 companies are considering entry into a new market. The cost of entry is 30. If only one company enters, then its gross profit is 200. If more than one company enters, then each entrant earns a gross profit of 40. The payoff to a company that enters is its gross profit minus its entry cost, while the payoff to a company that does not enter is 60. Find a symmetric Nash equilibrium in mixed strategies.
