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Author Question: If the businesses last forever, then the Nash Equilibrium is a. for one firm to charge a HP forever ... (Read 93 times)

Charlie

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on: Jul 1, 2018
If the businesses last forever, then the Nash Equilibrium is
 a. for one firm to charge a HP forever
  b. for your firm charge a LP when the other firm does
  c. for each firm to charge HP until the rival does, and then to charge a LP forever.
  d. for each firm to charge LP until the rival does, and then to charge a HP forever.

Question 2

A risk-neutral individual is offered a gamble that promises a gain of 1000 with probability 0.25 and a loss of 300 with probability 0.75 . Given this situation, he or she will:
 a. definitely take the gamble.
 b. definitely not take the gamble.
 c. definitely take the gamble if his or her income is high enough.
 d. take an action that cannot be determined given the information available.


Anton

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Reply #1 on: Jul 1, 2018
Answer to Question 1

c

Answer to Question 2

a


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