Firmasstrategiesconsistof

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Unformatted text preview: t strategy for Firm B is "low price". D. none of the statements associated with this question are correct. 16. What are the Nash equilibrium strategies for Firm A and Firm B respectively? A. (low price, low price). B. (high price, high price). C. (low price, high price). D. (low price, low price) and (high price, high price). 17. Which of the following is true? A. In an infinitely repeated game, collusion is always a Nash equilibrium. B. In a finitely repeated game with a certain end period, collusion is unlikely because effective punishments cannot be used during any time period. C. All of the statements associated with this question are correct. D. None of the statements associated with this question are correct. Refer to the following normal form game of price competition for question. 4 18. Firm B is the incumbent facing potential entry from its rival; Firm A. Firm A's strategies consist of {Entry, Stay Out}. Firm B's strategies are then {hard if entry; hard if stay out; soft if entry; soft if stay...
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This note was uploaded on 12/10/2012 for the course ECON 5501 taught by Professor Wing during the Fall '12 term at City University of Hong Kong.

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