Monday, December 16, 2019

Sunday, December 8, 2019

Monday, November 11, 2019

2019 Micro Set 1, FRQ # 3, Oligopoly

2019 Micro Set 1, FRQ # 3, Oligopoly



Watch me anser it here

                                             1st - Underline Patricks Pie's numbers 
                                             and square-in Dee's Pizza

                2nd - Do a word chart


a) What actions maximize the combined total profits for Patricks pie and Dee's pizza?

b) Conditional on your answer in part (a), does either Patrick or Dee have an incentive to cheat on this combination of actions that maximize the combined total profits? Explain using numbers from the payoff matrix.





c) Does Patrick have a dominant strategy?

d) Identify the Nash Equilibrium or equilibria actions for this game.



Nash Equilibrium = When neither player has an incentive to change its position

*** If neither player has a dominant strategy 

there can be two Nash Equilibria 
or 
No Nash Equilibria





e) Ignoring anti-trust considerations, suppose that Patrick pays Dees $20 to Stay-Out

i) Redraw the payoff matrix showing how the $20 payment to Dee affects the payoffs.


ii) Identify the Nash Equilibrium




Sunday, November 10, 2019

Fiscal & Monetary Policy (Combo) Question Cheat Sheet

Fiscal & Monetary Policy (Combo) Question 
Cheat Sheet



2019 Micro Set 2, FRQ #3, Oligopoly

2019 Micro Set 2, FRQ #3, Oligopoly



Watch Me answer it here

a) Is Jackpot's dominant strategy to close at 6pm or to close at 9pm, or does it have no dominant strategy.

b) Suppose jackpot chooses to close at 6pm and Boulevard chooses no delivery. Is this the profit-maximizing action by Boulevard? Explain using values from pay-off matrix.


c) How much profit will Boulevard earn in the Nash Equilibrium?

Understand that The Nash Equilibrium,, implies that both participants are in their best locations given the other participants choice.

1st - Understand that Jackpot will always close at 6pm = dominate strategy
2nd - Understand that Boulevard will choose to Deliver as that maximizes profit.

Boulevard will Deliver as $30 > $20 - Boulevard's profit is $30 in the Nash Equilibrium

d) Suppose the two companies merge with two locations and the same pay-offs. What strategy would the new company use to maximize its combined profits?
Why?
The payoff with the largest combined profit for two locations.

e)