bus620 Forum 5 module 5 latest 2015
Forum 5 module 5
Answer the 5th question plus 1 more from questions 1–4. Then
reply to 1 classmate’s thread.
A market has only 2 sellers. They are both trying to decide
on a pricing strategy. If both firms charge a high price, then each firm will
experience a 5% increase in profits. If both firms charge a low price, then
each firm will experience a 3% increase in profits. If Firm 1 charges a high
price and Firm 2 charges a low price, then Firm 1 will experience a 1% increase
in profits and Firm 2 will experience a 6% increase in profits. If Firm 2
charges a high price and Firm 1 charges a low price, then Firm 2 will
experience a 2% increase in profits and Firm 1 will experience a 7% increase in
profits.
Construct a payoff matrix for this game.
Determine whether each firm has a dominant strategy and, if
it does, identify the strategy.
Determine the optimal strategy for each firm.
Determine the Nash equilibrium. (v) Is this a prisoners’
dilemma? How do you know?
Why are cartels unstable and why do they often fail?
What is meant by (a) Zero-sum game? (b) Nonzero-sum game?
Provide examples in your discussion.
How can introducing yearly style changes lead to a
prisoners’ dilemma for automakers?
Respond to the charge that immigrants flood the labor market
and drive down wages in the U.S.
Additional information:
“When a foreigner resides among you in your land, do
not mistreat them. The foreigner residing among you must be treated as your
native-born. Love them as yourself, for you were foreigners in Egypt. I am the
LORD your God” (Leviticus 19:33–34, NIV).
“There is no evidence that over time, immigrants
reduced wages, lowered the living standards of the resident population or
raised unemployment rates.” — John Stapleford, Bulls, Bears, and Golden
Calves. IVP Academic (p. 227)
You must submit your thread by 11:59 p.m. (ET) on Thursday
of Module/Week 5 and your reply by 11:59 p.m. (ET) on Sunday of the same
module/week.
