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Unformatted text preview: c. (Down, Left) and (Up, Right) d. (Down, Right) e. (Up, Right) 4. (6) Find the Nash Equilibrium of the following game using the minimax method. Country A wants high payoffs. Country B wants low payoffs. Explain the method by which you found the equilibrium. Country B High Tariff Quota WTO complaint Sanctions-4 5 13 Embargo-2-3 8 Country A High Tariff 6 7 9 Quota 5 3-1 5. (5) Suppose that the two players in an oligopoly have the following reaction functions: Describe what the reaction function (or best response function) says about each player’s strategy in the context of this example. P A 10 5 5 10 P B Reaction function for Player B Reaction function for Player A...
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This test prep was uploaded on 04/22/2008 for the course ECON 242 taught by Professor Nonnenmacher during the Spring '06 term at Allegheny.
- Spring '06