Game Theory and Strategic Choices - End of Chapter Problem The Old Familiar and The Beehive are the only two bistros in town. Each is trying to decide whether or not it should advertise in the local newspaper. The accompanying payoff table gives their weekly profits under each possible outcome. The Beehive The Beehive does advertise does not advertise The Old Familiar The Old Familiar earns $X in profits. earns $3,500 in profits. The Old Familiar does advertise The Beehive The Beehive earns $Y in profits. earns $2,250 in profits. The Old Familiar The Old Familiar earns $2,000 in profits. earns $2,500 in profits. The Old Familiar does not advertise The Beehive The Beehive earns $4,000 in profits. earns $3,500 in profits. a. Which combination or combinations of X and Y would make a situation in which The Old Familiar does not advertise and The Beehive advertises a Nash equilibrium? A Nash equilibrium occurs if O X = $2,500; Y = $2,000. 0 X = $3,300; Y = $1,250. OX= $1,500; Y = $2,500. OX= $1,200; Y = $1,500. b. Which combination or combinations of X and Y would cause this game to have multiple Nash equilibria? Multiple Nash equilibria occur if OX= $1,200; Y = $1,500 1 X= $1,500; Y = $2,500 O X = $3,300; Y = $1,250 OX= $2,500; Y = $2,000 c. Based on your answer in part b, when this game has multiple Nash equilibria the game will be a coordination game an anti-coordination game a Prisoner's Dilemma game Game Theory and Strategic Choices - End of Chapter Problem The Old Familiar and The Beehive are the only two bistros in town. Each is trying to decide whether or not it should advertise in the local newspaper. The accompanying payoff table gives their weekly profits under each possible outcome. The Beehive The Beehive does advertise does not advertise The Old Familiar The Old Familiar earns $X in profits. earns $3,500 in profits. The Old Familiar does advertise The Beehive The Beehive earns $Y in profits. earns $2,250 in profits. The Old Familiar The Old Familiar earns $2,000 in profits. earns $2,500 in profits. The Old Familiar does not advertise The Beehive The Beehive earns $4,000 in profits. earns $3,500 in profits. a. Which combination or combinations of X and Y would make a situation in which The Old Familiar does not advertise and The Beehive advertises a Nash equilibrium? A Nash equilibrium occurs if O X = $2,500; Y = $2,000. 0 X = $3,300; Y = $1,250. OX= $1,500; Y = $2,500. OX= $1,200; Y = $1,500. b. Which combination or combinations of X and Y would cause this game to have multiple Nash equilibria? Multiple Nash equilibria occur if OX= $1,200; Y = $1,500 1 X= $1,500; Y = $2,500 O X = $3,300; Y = $1,250 OX= $2,500; Y = $2,000 c. Based on your answer in part b, when this game has multiple Nash equilibria the game will be a coordination game an anti-coordination game a Prisoner's Dilemma game