In a duopoly game we observe the following payouts: if the two firms collude they will each earn $50,000. If one firm cheats then he earns $60,000 and the other firm earns -$10,000. If both firms cheat then they each earn zero economic profit
In this game what is the Nash equilibrium? A) Both firms cheat.
B) Only one firm will cheat.
C) Neither firm will cheat.
D) It is impossible to say.
A
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Expansionary monetary policy ________
A) lowers tax rates B) increases interest rates C) increases tax rates D) lowers interest rates
In general, each additional year of schooling is worth about:
A. 10 percent more in overall earnings over the course of a lifetime. B. 5 percent more in overall earnings over the course of a lifetime. C. 25 percent more in overall earnings over the course of a lifetime. D. 50 percent more in overall earnings over the course of a lifetime.
If the Fed injects additional reserves into the banking system, why will banks generally want to expand their loans and investments?
a. Banks are legally required to expand loans when the Fed creates excess reserves. b. Maintaining reserves in excess of demand deposits is against the law. c. Banks fear the Fed will remove the excess reserves. d. Loans and investments generally earn more interest income for the banks than excess reserves.
The Federal Reserve District Banks are owned by
A. the federal government. B. a combination of state governments and the federal government. C. the board of governors. D. their member banks.