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Two firms at the St. Louis airport have franchises to carry passengers to and from hotels in downtown St. Louis. These two firms, Metro Limo and Urban Limo, operate nine passenger vans. These duopolists cannot compete with price, but they can compete through advertising. Their payoff matrix is below: <此处为图片> (缺图)【缺少答案，请补充】

Does each firm have a dominant strategy? If so, explain and what that strategy is. (缺图)

What is the Nash equilibrium? Explain where the Nash equilibrium occurs in the payoff matrix. (缺图)

Consider two firms, X and Y, that produce super computers. Each can produce the next generation super computer for the military (M) or for civilian research (C). However, only one can successfully produce for both markets simultaneously. Also, if one produces M, the other might not be able to successfully produce M, because of the limited market. The following payoff matrix illustrates the problem. <此处为图片> (缺图)【缺少答案，请补充】

Find the Nash equilibrium, and explain why it is a Nash equilibrium. (缺图)

If Firm X were unsure that the management of Firm Y were rational, what would Firm X choose to do if it followed a maximin strategy? What would both firms do if they both followed a maximin strategy? (缺图)

G.C. Donovan Company is a large pharmaceutical company located in the U.S., but with worldwide sales. Donovan has recently developed two new medications that have been licensed for sale in European Union countries. One medication is an over-the-counter cold preparation that effectively eliminates all cold symptoms, while the other is an antibiotic that is effective against drug resistant bacteria. A European firm, Demtech Limited, has developed drugs that are similar to Donovan's and will be ready for the European market at approximately the same time. Liability concerns make it unlikely that either firm will choose to market both new drugs at this time. Both firms do plan to market one of the drugs this year. Donovan's managers consider their own lack of reputation among European physicians to be an important obstacle in the antibiotic market. Consequently, Donovan feels more comfortable marketing the cold preparation. Demtech, on the other hand, has an excellent reputation among physicians but little experience in over-the-counter drugs so that Demtech's competitive advantage is with the antibiotic. Should Demtech choose to market the cold remedy, it believes that its sales will increase if Donovan also enters the cold remedy market and advertises heavily. Similarly, Donovan anticipates that its sales in the antibiotic market would be enhanced if Demtech produces antibiotics, given Demtech's excellent reputation among physicians. In short, each firm believes that there are circumstances under which participation by the other firm will complement rather than compete with the firm's own sales. Profits in millions of dollars are given in the payoff matrix below. <此处为图片> (缺图)【缺少答案，请补充】

Given the table above, does either firm have a dominant strategy? Is there a Nash equilibrium? (Explain the difference between a Nash equilibrium and a dominant strategy.) (缺图)

Pharmaceutical firms within the EU are attempting to organize a risk pool that would share liability risks for new drugs. Since Donovan and Demtech are among the largest pharmaceutical companies operating in Europe, the benefits of the risk pool depend upon the participation of the other firm. Increased profits achieved through reduced risk liability (measured in millions of dollars) are shown in the payoff matrix below. <此处为图片> Does either firm have an incentive to use participation in the risk pool as a bargaining device in the drug-marketing decision? If so, what would be the nature of the bargain? How credible is the firm's bargaining position? What could be done to make the bargaining position more credible? (缺图)

A "Credible Threat":

Repetition of a game:

What is true about dominant strategies in the game in Scenario 13.11? (缺图)

The strategy that worked best in Axelrod's experiments using the Prisoners' Dilemma game was to:

What kind of game is shown in Scenario 13.11?

In the game in Scenario 13.11, equilibrium is:

When cost and demand are stable over time in an industry, repetition of Prisoners' Dilemma situations:

For infinitely repeated games in which the players follow a tit-for-tat strategy, which one of the following outcomes is NOT possible?

Which of the following situations is likely to generate noncooperative behavior in repeated games?

Why does cooperative behavior break down in games with finite endpoints?

Does either firm have a dominant strategy? What strategy should each firm follow? (缺图)

Assume that the game is to be played an infinite number of times. (Or, equivalently, imagine that neither firm knows for certain when rounds of the game will end, so there is always a positive chance that another round is to be played after the present one.) Would the tit-for-tat strategy would be a reasonable choice? Explain this strategy. (缺图)

Assume that the game is to be played a very large (but finite) number of times. What is the appropriate strategy if both firms are always rational? (缺图)