Need assistance with the following question (attached word file)
1. Alpha and Beta, two oligopoly rivals in a duopoly market, choose prices of their products on the first day of the month. The following payoff table shows their monthly payoffs resulting from the pricing decision they can make.
High $200,$300 $50, $350
Low $300,$150 $75, $200
a) Is the pricing decision facing Alpha and Beta a prisoners' dilemma? Why or why not?
b) What is the cooperative outcome? What is the non-cooperative outcome?
c) If Alpha and Beta make their pricing decision just one time, will they choose the cooperative outcome? Why or why not?
d) Can Alpha make a credible threat to punish Beta with a retaliatory price cut? Can Beta make a credible threat of a retaliatory price cut?
e) For each of the following events, explain whether Beta would be more or less likely to cooperate:
i. Beta expects to be able to cheat for more than two months before getting caught by Alpha.
ii. Alpha announces that it will match any price cut by Beta, and it will do so immediately following any price cut by Beta.
iii. Alpha hires a new CEO who has a reputation for relentlessly matching price cuts by rivals, even after rivals are ready to resume cooperative pricing.
iv. Alpha alters the design of its product to make it more desirable to some consumers than Beta's product.
We can find the dominant strategy by indicating each player's best move, given the other's, with (d):
High $200,$300 $50, $350 (d)
Low $300(d), $150 $75 (d), $200 (d)
Both players have the dominant strategy of pricing low.
A prisoner's dilemma occurs when each player's attempts to maximize his payoff, given the other player's choice, does not result in the maximum total payoff for both players. In this case, Beta and Alpha's best choices regardless of the other's choice is to price low. But, they are both better off pricing high. This is therefore a prisoner's dilemma.
Pricing decisions and game theory in oligopoly
Create a table differentiating Between Market Structures. Discuss labor markets in general and for a specific industry.
SEE ATTACHED. It is easier to read than below.
Part I: Differentiating Between Market Structures Table
Prepare a table that describes the characteristics of competitive markets, monopolies, and oligopolies. Format the table as follows:
a. Column headings should be the four market structures:
b. Row headings should help explain the basis for your market characterization:
Perfect competition Monopoly Monopolistic Competition Oligopoly
An example of an organization
Goods or services produced by the organization
Barriers to entry
Numbers of organizations
Price elasticity of demand
Economic profits (Is there a presence of economic profits? (Yes or no.)
Part II: Differentiating Between Market Structures Paper
Prepare a 1,050-1,400-word paper summarizing the content of the table. Address the following questions:
a. Compare and contrast public goods, private goods, common resources, and natural monopolies.
b. Explain how labor market equilibrium is affected by the supply and demand of labor.
c. Select an organization with which you are familiar and identify the market structure of that organization. Evaluate the effectiveness of this structure for the organization.
d. For your selected organization, summarize the factors that affect labor supply and demand.
Be sure to properly cite your references. If you used an electronic source, include the URL. If you used a printed source please attach a copy of the data to your paper.View Full Posting Details