Business, 08.09.2021 18:30 shreyasvrangan

Collusive outcome versus Nash equilibrium Consider a remote town in which two restaurants, All-You-Can-Eat Cafe and GoodGrub Diner, operate in a duopoly. Both restaurants disregard health and safety regulations, but they continue to have customers because they are the only restaurants within 80 miles of town. Both restaurants know that if they clean up, they will attract more customers, but this also means that they will have to pay workers to do the cleaning. If neither restaurant cleans, each will earn $11,000; alternatively, if they both hire workers to clean, each will earn only $8,000. However, if one cleans and the other doesn't, more customers will choose the cleaner restaurant; the cleaner restaurant will make $16,000, and the other restaurant will make only $4,000. Complete the following payoff matrix using the previous information. (Note: All-You-Can-Eat Cafe and GoodGrub Diner are both profit-maximizing firms.)
GoodGrub Diner
All-You-Can-Eat Cafe Clean Don't Clean
Clean
Don't Clean
If All-You-Can-Eat Cafe and GoodGrub Diner decide to collude, the outcome of this game is as follows:
All-You-Can-Eat Cafe (clean/don't clean) and GoodGrub Diner (clean/don't clean).
If both restaurants decide to cheat and behave noncooperatively, the outcome reflecting the unique Nash equilibrium of this game is as follows: All-You-Can-Eat Cafe (clean/don't clean), and GoodGrub Diner (clean/don't clean).

Answers: 2

Show answers

Other questions on the subject: Business

Business, 21.06.2019 22:50, nourmaali

Which of the following statements is true? a job costing system will have a separate work in process account for each of the major processes. a process costing system will have a single work in process account. a process costing system will have a separate raw materials account for each of the major processes. a process costing system will have a separate work in process account for each of the major processes.

Answers: 3

continue

Business, 22.06.2019 12:50, cece4874

Suppose the real risk-free rate and inflation rate are expected to remain at their current levels throughout the foreseeable future. consider all factors that affect the yield curve. then identify which of the following shapes that the u. s. treasury yield curve can take. check all that apply.

Answers: 2

continue

Business, 22.06.2019 12:50, tayjohn9774

Kendrick is leaving his current position at a company, and charlize is taking over. kendrick set up his powerpoint for easy access for himself. charlize needs to work in the program that is easy for her to use. charlize should reset advanced options

Answers: 3

continue

Business, 22.06.2019 13:20, sailesd57

Last year, johnson mills had annual revenue of $37,800, cost of goods sold of $23,200, and administrative expenses of $6,300. the firm paid $700 in dividends and had a tax rate of 35 percent. the firm added $2,810 to retained earnings. the firm had no long-term debt. what was the depreciation expense?

Answers: 2

continue

You know the right answer?

Collusive outcome versus Nash equilibrium Consider a remote town in which two restaurants, All-You-C...