Friday night. Prof Bhamoriya was scheduled to fly from Ahmedabad to Delhi on way

Question

Friday night. Prof Bhamoriya was scheduled to fly from Ahmedabad to Delhi on way to Kashipur on vel on the same flight. She was coming to the airport straight from a meeting with Chinese ors accompanying the Chinese Prime Minister on a historical visit to India. The investors had of good business management in her companies, as she was better known as an actress e was besaddled with flight delays. Suddenly his face lit up to find his favorite actress, Ms. Juhi due to tra invest sought evidence than as a businesswoman. She had been advised to seek the help of an Economics Pro a management case on the economies of scope between her current (Kolkata Knight fessor to write Riders) and past remarked that a game of business ventures (Red Chillies Entertainment Pvt. Ltd.). Prof. Abhradeep sit next to each fate was at display as both Prof. Bhamoriya and Ms. Juhi had a business incentive to other on the flight apart from the joy of meeting an idol that Prof. Bhamoriya would have enjoyed. Johnny Nash, who prided in claiming to be an economics expert explained the game of fate. He told them that both Prof. Bhamoriya and Ms. Juhi could gain from sitting next to each other and life would go on as usual if they went their own ways. If professor tried to sit next to her but she chose to sit elsewhere his effort would go waste but it was of no concern to her. If she tried to sit next to him and he chose to sit elsewhere the same was true for her effort. Ms. Juhi Sit next to Sit Elsewhere him Prof. Bhamoriya Sit next to her 20,20 0,1 -1,0 Sit Elsewhere Identify the Nash equilibrium, if any is possible, in this game? better payoff and how? a) Can collusive (3 points) a strategy yield a b) Can technology present a way to change the transaction costs and therefore make it easier to adopt a collusive and mutually beneficial strategy (2 points)

Explanation / Answer

The Nash equilibrium is to sit next as when Prof chooses to sit next to her the maximum benefit for juhi is to sit next to him. The benefit will be 20,20.collusive strategy will yield same result

B. Yes technology like Internet, mobiles etc will reduce transaction costs and both will be able to contact better and both will reach collusion agreement much easily than without technology

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