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The picture listed below is question for economic. SequentialMove Game. Now consider a sequentialmove game. Consider a po tential entrant deciding whether to enter in

The picture listed below is question for economic.

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SequentialMove Game. Now consider a sequentialmove game. Consider a po tential entrant deciding whether to enter in an industry with only an incumbent monopolist. The game tree below depicts this scenario. First, the potential entrant chooses whether to enter the industry or stay out. If it stays out, the game is over, the incumbent makes monopoly prots of 10, and the entrant makes no prots (zero payoff). If the entrant chooses to enter the industry, the monopolist responds either accommodating or ghting its entry A Find pure strategy Nash Equilibrium (equilibria) of the game. B Rewrite the tree form into a matrix form (as we did in the class), and nd its pure strategy Nash Equilibrium (equilibria). Is it different from part A? Accommodate Entry (4, 4) (-2, -2) Potential Entrant (o, 10) Wife Football Opera B Is there a dominated strategy for Husband? Wife? why? C Find pure strategy Nash Equilibrium (equilibria) of the game. Simultaneous-Move Game. A husband and a wife are leaving work, and do not remember which event they are attending to tonight. Both of them, however, remem- ber that last night's argument was about attending either the football game (the most preferred event for the husband) or the opera (the most preferred event for the wife). To make matters worse, their cell phones broke, so they cannot call each other to con- rm which event they are attending to. As a consequence, they must simultaneously and independently decide whether to attend to the football game or the opera. The payoff matrix in the gure below, describes the preference of the husband (wife) for the football game (opera, respectively). Payoffs also indicate that both players prefer to be together rather than being alone (even if they are alone at their most preferred event). A Is there a dominant strategy for Husband? Wife? why

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