Jim Bob\'s Diner and Bubba\'s BBQ Pit are the only two barbeque places in town a

Question

Jim Bob's Diner and Bubba's BBQ Pit are the only two barbeque places in town and offer three featured burgers: veggie, beef, and chicken. Both places decide to advertise in the local newspaper on the same day to promote one of these three items. If they choose the same burger, then they will split the customers and end up spending more on the ad than they make. If they choose different burgers, then both can make a profit. Both places choose simultaneously and cannot coordinate with the each other. Answer the questions below Jim Bob Veggic Beef Chicken Veggie 5,-55, 10 5, 8 Beef 10,55, -5 8,6 Chicken8.56,85,-5 a. Find all strictly dominated strategies. b. Find all pure strategy Nash equilibria.

Explanation / Answer

a) from bubba's point of view

if jim bob choose veggie burger then bubba choose beef burger

if jim bob choose beef burger then bubba choose chicken burger

if jim bob choose chicken burger then bubba choose beef burger

no, dominant strategy for bubba

from jim bob point's of view

if bubba choose veggie burger then jim bob choose beef burger

if bubba choose beef burger then jim bob choose chicken burger

if bubba choose chicken burger then jim bob choose beef burger

no dominant strategy for jim bob.

2) for pure nash equilibirium we take all possibilities.

a) if jim bob choose veggie burger then bubba choose beef burger

and if bubba choose beef burger then jim bob choose chicken burger.

so, no nash equilibirium.

b) if jim bob choose beef burger then bubba choose chicken burger

and if bubba choose chicken burger then jim bob choose beef burger.

so, ( chicken , beef) is a pure nash equilibirium.

c) ) if jim bob choose chicken burger then bubba choose beef burger

and if bubba choose beef burger then jim bob choose chicken burger.

so , ( beef, chicken) is a pure nash equilibirim.

d) if bubba choose veggie burger then jim bob choose beef burger.

and if jim bob choose beef burger then bubba choose chicken burger.

no, nash equilibirium.

e) if bubba choose beef burger then jim bob choose chicken burger.

and if jim bob choose chicken burger then bubba choose beef burger.

so , ( beef, chicken) is a pure nash equilibirim.

f) if bubba choose chicken burger then jim bob choose beef burger.

and if jim bob choose beef burger then bubba choose chicken burger.

so , (chicken, beef) is a pure nash equilibirim.

so, (chicken, beef) and (beef, chicken) are pure strategy nash equilibirium.

Related Questions

Navigate

• Browse (All)
• Browse J
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.