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HW5+6Ans - 3(EAA T(ETA T-3,1 4(EAT T(ETT T-2-1 5 All the...

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HW 5/6 Selected Ans: Q1) Strategies: Pepsi : Accommodate, Tough Coke: [EAA, EAT, ETA, ETT, NAA, NAT, NTA, NTT] Normal Form : Construct an eight by two matrix and fill in the payoffs as follows. 1. (EAA, A) , (EAT, A) : (1,2) 2. (ETA, A), (ETT, A) : (0, -3)
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Unformatted text preview: 3. (EAA, T), (ETA, T) : (-3,1) 4. (EAT, T), (ETT, T) : (-2, -1) 5. All the rest corresponding to Coke’s ‘not enter’ yield the payoff (0,5). Nash equilibria: (EAA, A), (EAT, A), (NAA, T), (NAT, T), (NTA, T), (NTT, T) BI solution: (EAT, A)...
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