In game in Scenario 13.8, what is the Nash equilibrium?
A) The strategy pair associated with $1, $10.
B) The strategy pair associated with $2, $0.
C) The strategy pair associated with $1, -$5000.
D) The strategy pair associated with $2, $2.
E) There is no Nash equilibrium in pure strategies.
D
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Consider a textile factory operating in the short run. Classify the following costs that the firm incurs as variable costs, sunk costs, and fixed costs
a) Cost of issuing identity cards to all workers b) Wages paid to workers of the factory c) Yearly rent paid for production space d) Tax paid on the sale of its products
In the health insurance market, moral hazard occurs when
A) chronically ill people buy insurance. B) insured people go to the doctor unnecessarily. C) patients sue their doctor. D) chronically ill people refuse appropriate medical treatment.