Mimi wants to support her son Jeff if he looks for work but not otherwise. Jeff (unlike most young people) wants to try to find a job only if his mother will not support his life of indolence. Suppose that Mimi can move first. This is illustrated by the extensive form diagram at right (Mimi's payoffs are on top, Jeff's on the bottom). What are the equilibia, and why? A. The Nash equilibrium is for Mimi to support and Jeff to loaf. B. The Nash equilibrium is for Mimi to support and Jeff to look for work. C. The Nash equilibria are for Mimi to support and Jeff to loaf and for Mimi to not support and Jeff to loaf. D. The Nash equilibria are for Mimi to support and Jeff to loaf and for Mimi to not support and Jeff to look for work. E. The Nash equilibrium is for Mimi to not support and Jeff to look for work. Now repeat the analysis if Jeff can move first (Jeff's payoffs are on top, Mimi's on the bottom). What are the Nash equilibria? A. The Nash equilibrium is for Jeff to look for work and Mimi to support. B. The Nash equilibria are for Jeff to look for work and Mimi to support and for Jeff to look for work and Mimi to not support. C. The Nash equilibrium is for Jeff to loaf and Mimi to support. D. The Nash equilibrium is for Jeff to look for work and Mimi to not support. E. The Nash equilibrium is for Jeff to loaf and Mimi to not support. Suppose that Toyota and GM are considering entering a new market for electric automobiles and that their profits (in millions of dollars) from entering or staying out of the market are given by the payoff matrix at right. If the firms make their decisions simultaneously, do either or both firms enter? A. The Nash equilibrium is for both firms to enter. B. The Nash equilibrium is for both firms to not enter. C. The Nash equilibrium is for Toyota to enter and GM to not enter. D. The Nash equilibrium is for GM to enter and Toyota to not enter. E. This game has no Nash equilibria. Suppose instead that the game were modified so that GM has a head start over Toyota and can move first. What is the Nash equilibrium? Explain. A. The Nash equilibrium is for GM to enter and Toyota to then enter. B. The Nash equilibrium is for GM to not enter and Toyota to then enter. C. This game has no Nash equilibria. D. The Nash equilibrium is for GM to not enter and Toyota to then not enter. E. The Nash equilibrium is for GM to enter and Toyota to then not enter. Mimi wants to support her son Jeff if he looks for work but not otherwise. Jeff (unlike most young people) wants to try to find a job only if his mother will not support his life of indolence. Suppose that Mimi can move first. This is illustrated by the extensive form diagram at right (Mimi's payoffs are on top, Jeff's on the bottom). What are the equilibia, and why? A. The Nash equilibrium is for Mimi to support and Jeff to loaf. B. The Nash equilibrium is for Mimi to support and Jeff to look for work. C. The Nash equilibria are for Mimi to support and Jeff to loaf and for Mimi to not support and Jeff to loaf. D. The Nash equilibria are for Mimi to support and Jeff to loaf and for Mimi to not support and Jeff to look for work. E. The Nash equilibrium is for Mimi to not support and Jeff to look for work. Now repeat the analysis if Jeff can move first (Jeff's payoffs are on top, Mimi's on the bottom). What are the Nash equilibria? A. The Nash equilibrium is for Jeff to look for work and Mimi to support. B. The Nash equilibria are for Jeff to look for work and Mimi to support and for Jeff to look for work and Mimi to not support. C. The Nash equilibrium is for Jeff to loaf and Mimi to support. D. The Nash equilibrium is for Jeff to look for work and Mimi to not support. E. The Nash equilibrium is for Jeff to loaf and Mimi to not support. Suppose that Toyota and GM are considering entering a new market for electric automobiles and that their profits (in millions of dollars) from entering or staying out of the market are given by the payoff matrix at right. If the firms make their decisions simultaneously, do either or both firms enter? A. The Nash equilibrium is for both firms to enter. B. The Nash equilibrium is for both firms to not enter. C. The Nash equilibrium is for Toyota to enter and GM to not enter. D. The Nash equilibrium is for GM to enter and Toyota to not enter. E. This game has no Nash equilibria. Suppose instead that the game were modified so that GM has a head start over Toyota and can move first. What is the Nash equilibrium? Explain. A. The Nash equilibrium is for GM to enter and Toyota to then enter. B. The Nash equilibrium is for GM to not enter and Toyota to then enter. C. This game has no Nash equilibria. D. The Nash equilibrium is for GM to not enter and Toyota to then not enter. E. The Nash equilibrium is for GM to enter and Toyota to then not enter
