Purchase Solution

outcome of the game

Not what you're looking for?

Ask Custom Question

On W Beach, there are two hotels, Wd and B. The practice of guaranteed price matching is illegal. If the two firms act independently (they do not engage in price fixing or any other collusive behavior), each firm will rent 50 rooms per day at a price of $50 per room and an average cost of $45 per room. Under a price-fixing or cartel arrangement, each hotel would rent 30 rooms per day at a price of $60 and an average cost of $48. If one firm charges $50 and the other firm charges $60, the low-price firm will earn a profit of $500, and the high-price firm will earn a profit of $150. Bizarre picks a price first, followed by Wed.

a. Suppose each firm must pick a price and maintain its chosen price for the remaining lifetime of the firm. an example, draw a payoff table and predict the outcome of this game.

b. Suppose the two firms can change their prices daily, and expect to be in business for 3 more days. Wed announces that he will start with the high price, and maintain the price as long as Bizarre does too. If B undercuts Weird, however, Weird will pick the low price for the remainder of the game. Predict the outcome of the game. Use the numbers provided.

Purchase this Solution
Solution Summary

The outcome of the game is displayed.

Purchase this Solution
Free BrainMass Quizzes
Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.

Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.

Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.

Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.

Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.

View More Free Quizzes
Related BrainMass Solutions

  • Game theory

    How would the outcome of the game played according to the contract differ from the game as played in part a.? c. The game in part a. is a repeated game in the sense that several turns are possible.

  • Expected Value of Game

    Expected Outcome = sum of [ X * P(X) ] In a 6 sided die, probability of outcome of each number is 1/6 so E(x) = 90 x 1/6 - 12 x 1/6 - 12 x 1/6 - 12 x 1/6 - 12 x 1/6 - 12 x 1/6 = $5. The solution determines the expected value of the game.

  • Why would this be described as a Prisoner's Dilemma game?

    Explain the probable outcome of this game. The solution file is attached. This solution discusses why this game fits the zero-sum framework of the prisoner's dilemma and demonstrates the probable outcome of the game.

  • Hotel pricing game

    If Bizarre undercuts Weird, however, Weird will pick the low price for the remainder of the game. Predict the outcome of the game. Use the numbers provided.

  • Proof of density function

    74428 Proof of density function In the game of odd man wins, three people toss coins. The game continues until someone has an outcome different from the other two. The individual with the different outcome wins.

  • Probability & Statistics : Outcome of Dice Rolls

    44444 Probability & Statistics : Outcome of Dice Rolls Two people play a game. A single die is thrown. If the outcome is a 2 or a 3, then player A pays player B $6.00.

  • Oligopoly pricing

    If Bizarre undercuts Weird, however, Weird will pick the low price for the remainder of the game. Predict the outcome of the game. Use the numbers provided.

  • Prisoner's Dilemma game

    Explain why this would be described as a Prisoner's Dilemma game b. Explain the probable outcome of this game a.

  • Nash Equilibrium: Coke & Pepsi Ad War

    For example, if Coke chooses W, Pepsi gets its best outcome of 2000 by choosing W. A Nash equilibrium is any square where both outcomes are circled. In this game, each firm gets its best outcome by choosing W no matter what its opponent does.

View More Related Solutions