Refer to the normal-form game of advertising shown below.Firm AFirm B??AdvertiseDo Not Advertise?Advertise$0,$0$175,$10?Do Not Advertise$10,$175$125,$125Consider the advertising game in Figure 10-17. Firms A and B know the game will be played for exactly five periods. What is a Nash equilibrium to this game?
A. {do not advertise, do not advertise} provided the interest rate is less than 0.10 percent
B. {advertise, advertise}
C. {advertise, advertise} provided the interest rate is less than 0.50 percent
D. {advertise, do not advertise}
Answer: D
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In the United States the stake of top management in firms' ownership usually is
A) less than 5%. B) more than 25%. C) more than 50%. D) more than 75%.
A recessionary gap is defined as
a. an economy that is operating above its full-employment capacity b. an economy that is operating at full-employment capacity c. the amount by which aggregate expenditure exceeds the aggregate expenditure level needed to generate equilibrium national income at full employment without inflation d. the amount by which aggregate expenditure falls short of the level needed to generate equilibrium national income at full employment without inflation e. the path an economy takes out of a depression