Mike and Sophie are splitting up and need to decide who will get the car they purchased together. Using the method of sealed bids, Mike bids $5,000 and Sophie bids $4,500 for the car. Since Mike's bid is higher, he gets the car, and has to compensate Sophie with cash. How much will he have to pay Sophie in order to keep the division fair?
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Mike and Sophie are splitting up and need to decide who will get the car they purchased together. Using the method of sealed bids, Mike bids $5,000 and Sophie bids $4,500 for the car. Since Mike's bid is higher, he gets the car, and has to compensate Sophie with cash. How much will he have to pay Sophie in order to keep the division fair?
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- Suppose that Lionel Messi is negotiating a contract with FC Barcelona. Messi has an offer from Real Madrid for $20 million a year. If he signs with FC Barcelona, they will earn $90 million in revenue from the signing. FC Barcelona's next best option is to sign Cristiano Ronaldo. They would earn $70 million from signing Ronaldo and would pay him a contract of $10 million. Messi's bargaining power is w = 1/2. a) What is the negotiated salary between Messi and FC Barcelona under Nash Bargaining? What is Messi's surplus and what is FC Barcelona's surplus? b) Due to an injury, FC Barcelona would only earn $50 million from signing Ronaldo but everything else remains the same. What is the negotiated salary between Messi and FC Barcelona under Nash Bargaining? What is Messi's surplus and what is FC Barcelona's surplus?Syukri, Iqmal and Amir run the only shop in Wang Ulu. They sell electrical goods such as televisions, washing machines, etc. However, their objectives are different from each other. Syukri wants to make as much profit as he can, Iqmal wants to sell as many goods as he can without losing money, and Amir wants to earn as much revenue as he can. The graph below illustrates their respective profits. (Note: The length of each square on the Y-axis represents RM100, and the length of each square on the X-axis represents 100 units.) 1.What is the profit for Amir?A.195,000B.0C.180,000D.160,000E.150,000F.100,000G.270,000H.300,000I.20,0002.What is the profit for Iqmal?A.195,000B.0C.180,000D.160,000E.150,000F.100,000G.270,000H.300,000I.20,000 3.What is the profit for SyukriA.195,000B.0C.180,000D.160,000E.150,000F.100,000G.270,000H.300,000I.20,0004.The graph shows that the firm in theA.perfectly competitive marketB.monopoly marketSyukri, Iqmal and Amir run the only shop in Wang Ulu. They sell electrical goods such as televisions, washing machines, etc. However, their objectives are different from each other. Syukri wants to make as much profit as he can, Iqmal wants to sell as many goods as he can without losing money, and Amir wants to earn as much revenue as he can. The graph below illustrates their respective profits. (Note: The length of each square on the Y-axis represents RM100, and the length of each square on the X-axis represents 100 units.) 1.What is the price for Amir?A.100B.200C.300D.400E.500F.600G.700H.800I.900J.1000 2.What is the price for Iqmal?A.100B.200C.300D.400E.500F.600G.700H.800I.900J.1000 3.What is the price for Syukri?A.100B.200C.300D.400E.500F.600G.700H.800I.900J.1000
- Cooper and Rebecca run the only two lawncare companies in a small town. If they worked independently, they would each earn $3000. If they cooperated, they know they could raise the price of their lawncare services and service fewer lawns, but can each earn $4500. If one person raises prices and other does not, the person who raises prices will earn $1000 and the other will earn $6000. Draw a table representing their dilemmSyukri, Iqmal and Amir run the only shop in Wang Ulu. They sell electrical goods such as televisions, washing machines, etc. However, their objectives are different from each other. Syukri wants to make as much profit as he can. Iqmal wants to sell as many goods as he can without losing money, and Amir wants to earn as much revenue as he can. The graph below illustrates their respective profits. Note: The length of each square on the Y-axis represents RM100, and the length of each square on the X-axis represents 100 units 1 what is the profit for amir? 2 what is the profit for iqmal?Syukri, Iqmal and Amir run the only shop in Wang Ulu. They sell electrical goods such as televisions, washing machines, etc. However, their objectives are different from each other. Syukri wants to make as much profit as he can. Iqmal wants to sell as many goods as he can without losing money, and Amir wants to earn as much revenue as he can. The graph below illustrates their respective profits. Note: The length of each square on the Y-axis represents RM100, and the length of each square on the X-axis represents 100 units 1 what is quantity for syukri? 2 what is quantity for iqmal? 3 what is quantity for amir? 4 what is price for amir? 5 what is price for iqmal? 6 what is price for syukri? 7 what is the profit for amir? 8 what is the profit for iqmal? 9 what is the profit for syukri?
- You play the following bargaining game. Player A moves first and makes Player B an offer for the division of $1000. (For example, Player A could suggest that she take $600 and Player B take $400.) Player B can accept or reject the offer. If he rejects it, the amount of money available drops to $800, and he then makes an offer for the division of this amount. If Player A rejects this offer, the amount of money drops to $700 and Player A makes an offer for its division. If Player B rejects this offer, the amount of money drops to $0 and player A keeps the $700. Both players are rational, fully informed, and want to maximize their payoffs. Which player will do best in this game? Assume that monetary divisions must take the form of dollars (rather than cents or smaller denominations) and, in each round, a player will offer at least $1. The player that will do best in this game is because when following his optimal strategy he should receive a payoff of $ (Enter a numeric response using an…The Tampa Tribune and the St. Petersburg Times compete for readers in the Tampa Bay market for newspapers. Recently, both newspapers considered changing the prices they charge for their Sunday editions. Suppose they considered the following payoff table for making a simultaneous decision to charge either a low price of $0.50 or a high price of $1.00. Tampa’s profits are shown in regular type. St. Petersburg’s profits are shown in bold. 7. Which cell(s) is/are strategically stable?There are two oil producers, Saudi Arabia and Iran (these are countries which we are treating as players in this example). The market price will be $60/barrel if the total volume of sales is 9 million barrels daily, $50 if the total volume of sales is 11 million barrels daily, and $35 if the total volume of sales is 13 million barrels daily. Saudi Arabia has two strategies; either produce 8 million barrels daily or 6 million. Iran has two strategies; either produce 3 million barrels daily or 5 million. Assume for simplicity that marginal cost of production is zero for both countries. Here is the normal form representation of this game (where Saudi Arabia and Iran are players, they can choose strategies over what quantity to produce and they face payoffs in terms of profits). Note that the following paragraph is simply an explanation of this representation of the game. If you are already comfortable with the structure, feel free to skip to the questions below the horizontal line…
- There are two oil producers, Saudi Arabia and Iran (these are countries which we are treating as players in this example). The market price will be $60/barrel if the total volume of sales is 9 million barrels daily, $50 if the total volume of sales is 11 million barrels daily, and $35 if the total volume of sales is 13 million barrels daily. Saudi Arabia has two strategies; either produce 8 million barrels daily or 6 million. Iran has two strategies; either produce 3 million barrels daily or 5 million. Assume for simplicity that marginal cost of production is zero for both countries. Here is the normal form representation of this game (where Saudi Arabia and Iran are players, they can choose strategies over what quantity to produce and they face payoffs in terms of profits). Note that the following paragraph is simply an explanation of this representation of the game. If you are already comfortable with the structure, feel free to skip to the questions below the horizontal line…There are two oil producers, Saudi Arabia and Iran (these are countries which we are treating as players in this example). The market price will be $60/barrel if the total volume of sales is 9 million barrels daily, $50 if the total volume of sales is 11 million barrels daily, and $35 if the total volume of sales is 13 million barrels daily. Saudi Arabia has two strategies; either produce 8 million barrels daily or 6 million. Iran has two strategies; either produce 3 million barrels daily or 5 million. Assume for simplicity that marginal cost of production is zero for both countries. Here is the normal form representation of this game (where Saudi Arabia and Iran are players, they can choose strategies over what quantity to produce and they face payoffs in terms of profits). Note that the following paragraph is simply an explanation of this representation of the game. If you are already comfortable with the structure, feel free to skip to the questions below the horizontal line…The band is breaking up and Rob, Sue, Tim and Vito each want the tour bus. Using the method of sealed bids, Rob bids $2000, Sue bids $3100, Tim bids $5900, and Vito bids $7000 for the bus. Since Vito's bid is the highest, he gets the bus and has to compensate the others to make the division fair. How much money will Sue get from Vito?
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