Dar A and Bar Bare located across the street from each other , and are both deciding how much to charge for a pint of beer : $10 or $1 . There are…

  • Bar A and Bar B are located across the street from each other, and are both deciding

    how much to charge for a pint of beer: $10 or $4. There are 100 potential customers.

    Of these, x are loyal customers of Bar A: they will each buy their pint of beer from

    Bar A, no matter what prices each bar charges. The remaining 100-x customers will

    buy their pint from whichever bar charges the lowest price. If both bars charge the

    same price, each of these 100-x customers will choose randomly between the two

    bars so that, on expectation, half of them will end up at each bar. Payoffs for each

    bar are equal to expected revenues.

    1 . Dar A and Bar Bare located across the street from each other , and are both decidinghow much to charge for a pint of beer : $10 or $1 . There are Ing potential customers .Of these , I are loyal customers of Bar A: they will each buy their pint of beer from*Bar A, no matter what prices each bar charges . "The remaining Law _ I customers willbuy their pint from whichever bar charges the lowest price . If both bars charge thesame price , Each of these 10` – I customers will change randomly between the twobars so that , an expectation , half of them will end up at each bar . Parolls for Eachbur are equal to expected revenues .[ a ] Fill in the payoff’s in the following table*BUT B`$ 10$ 10BUT A$ 4It’s True or false: " Both bars charging $ 10 is a Nash equilibrium for any 100 = = = . "Provide & proof of your answer .(C ) Fill in the blank , and show your work ."If I{`_, both bars charging $ 4 is aNash equilibrium ."

 
"Looking for a Similar Assignment? Get Expert Help at an Amazing Discount!"