Name: ______________________________________
Date: _________________________
Oligopoly Extended Practice
Is there a Nash equilibrium in this game? If so, circle it.
12. Player A has two strategies, Yellow and Green, and Player B has two strategies, Red and Blue. The game is
played simultaneously with both players playing pure strategies and being able to see the other player’s actions.
The game, with strategies and payoffs is given by the following payoff matrix:
13. Does either player have a dominant strategy? If so, what is it?
14. What is the Nash equilibrium of the game? Explain.
15. Is this a Prisoner’s dilemma? Explain.
B
A
Advertise
Don’t Advertise
Advertise
100, 85
90, 80
Not Advertise
75, 60
60, 70
A and B are oligopolies that can choose between whether or not to advertise or not to advertise.
17. Does either player have a dominant strategy? If so, what is it?
18. What is the Nash equilibrium of the game? Explain.
B
A
Maintain
Lower Price
Maintain
40, 30
50, 60
Lower Price
60, 40
100, 80
A and B are oligopolies that can choose between whether to maintain their price or lower their price.
19. Does either player have a dominant strategy? If so, what is it?
20. What is the Nash equilibrium of the game? Explain.