What is a Nash equilibrium? Is this equilibrium necessarily the best outcome for the players? Give an example
What will be an ideal response?
John Nash proposed the concept of an equilibrium in a game where each player takes the best possible action given the action of other players. A Nash equilibrium is not necessarily the best one for the players. This result can be seen in the prisoners' dilemma. Typically the prisoners' dilemma is a game where two prisoners are given rules and payoffs to encourage them to confess to a crime. The prisoners, acting in their own self-interest, confess to the crime to minimize their jail time and so confession is the Nash equilibrium. But if the players can communicate with each other, they can improve their position. If they can communicate, they both deny the crime and so both wind up doing less time in jail.
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To an economist, "value" is the same as
A) marginal cost. B) consumer surplus. C) the minimum price that people are willing to pay for another unit of the good. D) marginal benefit. E) total surplus.
A carefully written partnership agreement can maximize the advantages of the partnership structure and minimize the potential disadvantages. Which of the following points will help in writing an effective partnership? agreement?
A. A partnership agreement should strictly follow only the state? laws, as they will drive the business. B. Incorporate a broad and general understanding of what the business association will be to allow for flexibility. C. A great personal partnership cannot get in the way of a successful business partnership. D. Address the hopes of each? owner, decision-making? strategies, and succession and exit strategies. E. ?Dispute-resolution procedures should be? avoided, as they apply to corporations.