What is a dominant strategy equilibrium?
What will be an ideal response?
When a player has the same best response to every possible strategy of the other players, then we say that the player has a dominant strategy. A combination of strategies is a dominant strategy equilibrium if each strategy is a dominant strategy.
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An empirical study compared the price of eyeglasses in states that restricted advertising by optometrists with those that did not.The study revealed:
a. That the average price of eyeglasses in states where advertising was restricted was higher than the average price in states were advertising was not restricted b. That the average price of eyeglasses in states where advertising was not restricted was higher than the average price in states where advertising was restricted c. That the average price of eyeglasses did not differ between states where advertising was restricted and those in which advertising was not restricted d. That the greater the level of advertising, the higher the average price of eyeglasses
Which of the following is an unintended consequence of welfare?
a. A low marginal tax rate on earned income for welfare recipients. b. A reduced incentive to leave welfare if more benefits are lost when income begins to be earned. c. A lower probability that children of families on welfare will themselves receive welfare. d. A welfare recipient becomes more productive, increasing the expected wage.