Two individuals are in negotiations to terminate a contract. Person A, was the signatory to the control that she had to execute in partnership with Person B and is in possession of the pay- out. The contract is worth R1 000. The mediator asks Person A to choose how much of this contract value she is willing to offer person B. Person B, will then be asked to decide whether to accept the offer or reject it. If Person B rejects the offer, neither player receives any money. Using table or decision tree illustrate the possible payoffs. Determine if Nash equilibrium exist.
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- First Player can invest $1.00 with Second Player. Second Player chooses whether tc cooperate and make the promised investment, or appropriate and keep First Player'a $1.00. Based on the payoff matrix shown below (first player payoffs on bottom left of cell, second player payoffa on upper right of cell), what will be First Player's payoff if contracis are not enforceable? Second Player Cooperate Appropriate Invest 1.5 1.0 First Player 1.5 -1.0 Don't Investi am not sure how to ask anther question after the expert answered one of mine but here is a question i asked the expert and the naswer he game me in picture 1 & 2. the questions insnt linked from other sites its from bartleby just coudlnt see option to ask anther. can you answer this part now: Now assume the financial advisor knows that another advisor will offer a competitive portfolio. Based on historical data, he knows this competitive portfolio’s total return follows a normal distribution with mean £36mil and standard deviation of £2mil and is priced at 5% of total return. Clients will naturally choose the advisor which offers the portfolio with the highest net How does the distribution of profit over the range of financial prices considered in part B) changes, when the competitor is considered?li5,3,2) A (0,1, 1) -(3,2,6) (0.6,5) Y(2,1,4) R /6,3,0) -40,6) -(3,1,7) Is there Subgame Perlact Nash Equilibaion! I se what s it? 30,
- 0 E F 3 2 FIGURE 2 23 D G 2 H 0 1 (2) Two friends, Albert (A) and Berta (B), have to decide on going to one of three bars, Xenia's (X), Yara's (Y), or Zana's (Z). They decide to select a bar by alternatively vetoing bars until one remains. First Albert vetoes a bar. If at least two bars remain, then Berta vetoes another bar. That process continues until a single bar remains unvetoed. Suppose Albert prefers Xenia's to Yara's to Zana's and Berta prefers Zana's to Yara's to Xenia's. Assume that, for each of the two, going to their most preferred bar gives a utility of 2, going to their next preferred bar gives a utility of 1, and going to their least preferred bar gives a utility of 0. Model this as an extensive form game and find its Nash equilibria. Which of the Nash equilibria are subgame perfect?There are 2 players. They take Ston eS From the Pilt of 6 Stones. Player 1 can takt only 2 or 3 Stones. piayer 2 can taKeS only 2 or 4 StonesS. P layers take turns, observe dil Previous moves, and player 1 mover first. A pla yer loses if She can not make a legal move, While another player ir declared the Winner. Let the pay oF OF Winning egval to 1 and the payoFF OF losing equal to 0. a) represent the in ɛxtemsive Form (depict Only legalmoes) b) Find all SPNE OF this game& explain your a mwwer. Who Will Win ? game Only legalmar)he person who requires high return regardles bf nsk s called (a There 1s no difference between return d riok preference. Drish averse O risk neutral (indifferent) (ay risk seeking
- Consider a small town with two competing restaurants: Doug’s Diner and Betty’s Bistro. There is 1000profit to be made in the market. Each period, the restaurants simultaneously decide whether to offer high orlow quality food. In order to offer high quality food, each restaurant must hire an expert chef, which incursan additional cost of 100. The restaurants split the profit equally if they offer the same quality of food. Ifone restaurant offers high quality food while the other offers low quality food, the high quality restauranttakes four fifths of the profit and the low quality restaurant takes one fifth of the profit.(a) Draw up the normal form game matrix, showing the players, strategies, and payoffs.(b) Determine the Nash equilibrium of this game.(c) Explain how the restaurant owners could both be better off than in the Nash equilibrium if they wereable to cooperate. Is the town as a whole better off or worse off when the firms cooperate? Why or whynot?1. The technology of interaction for a contractual relationship is given by the matrix below. 2 H L 1 H 5,5 0,8 L 7,0 1,1 Suppose the players write an incomplete contract stating that they agree to play the jointly-efficient outcome (that which maximizes the joint payoff as found in last week's homework). Assume that the court can verify exactly the outcome of produc- tion. (a) Suppose that the court uses expectation damages. Can the jointly- efficient outcome be implemented? Briefly explain. (b) Suppose that the court uses reliance damages. Can the jointly-efficient outcome be implemented? Briefly explain. (c) Suppose that the court uses restitution. Can the jointly-efficient out- come be implemented? Briefly explain.Your friend is contemplating buying a local restaurant. He has assessed the lifetime profits, including resale, to be $11 million with 20% chance, $6 million with 60% chance or $3 million with 20% chance. Knowing the most your friend would pay for the restaurant is $6.4 million, what can you infer about the situation? O A. The expected payoff of the restaurant is $6.333 million, the risk-discount being offered by your friend is $77.000 and your friend is risk averse with respect to this purchase. O B. The expected payoff of the restaurant is $6.4 million, the risk-premium being required by your friend $0 and your friend is risk neutral with respect to this purchase. o C. The expected payoff of the restaurant is $6.4 million, the risk-premium being required by your friend $200,000 and your friend is risk seeking with respect to this purchase. O D. The expected payoff of the restaurant is $6.333 million, the risk-premium being required by your friend is $333,000 and your friend is risk…
- Assume that a customer shops at a local grocery store spending an average of $200 a week, resulting a retailer profit of $10 each week from this customer. Assuming the shopper visits the store all 52 weeks of the year, calculate the customer lifetime value if this shopper remains loyal over a 10-year lifespan. Also assume a 5 percent annual interest rate and no initial cost to acquire the customer. Describe ways marketers can increase the lifetime value of a customer.Brown’s TV Production is considering producing a pilot for a comedy series for a major network. While the network may reject the pilot and series, it may also purchase the program for 1 or 2 years. Brown may produce the pilot or transfer the rights for the series to a competitor for $100,000. Brown’s profits are summarized in the following payoff table (profits in thousands). sate of nature reject 1 year 2 years produce pilot -100 50 150 sell to competitor 100 100 100 If the probability estimates for the states of nature are, P(reject)=0.20, P(1 year)=0.30, and P(2 years)=0.5, what is the maximum Brown should be willing to pay for inside information on what the network will do?A game is played as follows: First Player 1 decides (Y or N) whether or not to play.If she chooses N, the game ends. If she chooses Y, then Player 2 decides (Y or N) whetheror not to play. If he chooses N the game ends. If he chooses Y, then they go ahead and playanother game with the payoffs shown below. A player who opts out by choosing N gets 2 andthe other player gets 0. Draw the tree of this game and then find the two subgame-perfect Nashequilibria.