Questions from General Economics

Q: Asymmetric Bertrand: Consider the Bertrand game with c1(q1)

Asymmetric Bertrand: Consider the Bertrand game with c1(q1) = q1 and c2(q2) = 2q2, demand equal to p = 100 − q, and where firms must choose prices in increments of one cent. We have seen in section? t...

Q: More Oil: Chevron, the No. 2 US oil

More Oil: Chevron, the No. 2 US oil company, is facing a tough decision. The new oil project dubbed “Tahiti” is scheduled to produce its first commercial oil in mid-2008, yet it is still unclear how p...

Q: A strategy sW ∈ S is a weakly dominant strategy equilibrium if

A strategy sW ∈ S is a weakly dominant strategy equilibrium if sW ∈ Si is a weakly dominant strategy for all i ∈ N. That is if vi (sW, s−i) ≥ vi (s’i, s−i) for all s’i ∈ Si and for all s−i ∈ S−i. P...

Q: Negative Ad Campaigns: Each one of two political parties can choose

Negative Ad Campaigns: Each one of two political parties can choose to buy time on commercial radio shows to broadcast negative ad campaigns against their rival. These choices are made simultaneously....

Q: Hotelling’s Price Competition: Imagine a continuum of potential buyers, located

Hotelling’s Price Competition: Imagine a continuum of potential buyers, located on the line segment [0, 1], with uniform distribution. (Hence, the “mass” or quantity of buyers in the interval [, b] i...

Q: Political Campaigning: Two candidates are competing in a political race.

Political Campaigning: Two candidates are competing in a political race. Each candidate i can spend si ≥ 0 on adds that reach out to voters, which in turn increases the probability that candidate i wi...

Q: A player has three possible venues to choose from: going to

A player has three possible venues to choose from: going to a football game, going to a boxing match, or going for a hike. The payoff from each of these alternatives will depend on the...

Q: Drilling for Oil: An oil drilling company must decide whether

Drilling for Oil: An oil drilling company must decide whether or not to engage in a new drilling venture before regulators pass a law that bans drilling on that site. The cost of drilling is $1,000,0...

Q: eBay’s recommendation: It is hard to imagine that anyone is not

eBay’s recommendation: It is hard to imagine that anyone is not familiar with eBay© , the most popular auction website by far. The way a typical eBay auction works is that a good is placed for sale, a...

Q: Splitting Pizza: You and a friend are in an Italian restaurant

Splitting Pizza: You and a friend are in an Italian restaurant, and the owner offers both of you an 8-slice pizza for free under the following condition. Each of you must simultaneously announce how ma...