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I need a specific explanations for questions ABC, thank you. [6 Marks] Cardi and Drake are releasing albums on the same day. Each simultaneously chooses
I need a specific explanations for questions ABC, thank you.
[6 Marks] Cardi and Drake are releasing albums on the same day. Each simultaneously chooses how much to invest in promotion. Each person's investment must be at least $10, and must be in whole dollars. Whoever invests the most gets $100 in extra sales. Whoever invests the least gets no extra sales. If they each make the same investment, they each get $50 in sales. a) [1 Mark] If they can collude, what is the predicted outcome? b) [2 Mark] Very briefly explain why the collusive outcome is not a Nash equilibrium. c) [3 Mark] What is a Nash equilibrium of this game? Briefly explain why the outcome you predicted is a Nash equilibrium. [6 Marks] Cardi and Drake are releasing albums on the same day. Each simultaneously chooses how much to invest in promotion. Each person's investment must be at least $10, and must be in whole dollars. Whoever invests the most gets $100 in extra sales. Whoever invests the least gets no extra sales. If they each make the same investment, they each get $50 in sales. a) [1 Mark] If they can collude, what is the predicted outcome? b) [2 Mark] Very briefly explain why the collusive outcome is not a Nash equilibrium. c) [3 Mark] What is a Nash equilibrium of this game? Briefly explain why the outcome you predicted is a Nash equilibrium Step by Step Solution
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