Theory Nash Equilibrium and Price Discrimination Paper

Theory Nash Equilibrium and Price Discrimination Paper

Instructions/Descriptions

Theory Nash Equilibrium and Price Discrimination Paper

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Reflect on the assigned readings for Week 3 and then type a two-page paper regarding what you thought was the most important concept(s), method(s), term(s), and/or any other thing that you felt was worthy of your understanding. Define and describe what you thought was worthy of your understanding in half a page, and then explain why you felt it was important, how you will use it, and/or how important it is in managerial economics with respect to:

Direct Price Discrimination

Indirect Price Discrimination

Game Theory

Game Theory Nash Equilibrium Questions

Problem Set #5

1. Nestlé’s has over one hundred production facilities that all purchase hair nets and other hygienic supplies through independent suppliers. Nestlé created a centralized purchasing system that is cumbersome to use has the potential to bargain for lower prices. Suppose that a division can purchase hairnets for $8 independently. If they all purchase through the central system, hairnets cost $6. But if one division uses the system and the other purchases independently, the cost to the first is $9 while the cost to the second is $7. What does the simultaneous move game look like and what is the equilibrium?
2. The Doug’s Delicious Diner faces a demand curve for its daily special in which there are an equal number of potential buyers at every $0.20 price point between $8.00 and $6.00. If the marginal cost is $6.35, what price maximizes profits? Doug notices that at this price the unserved portion of demand are all senior citizens. If it offered a senior discount, how much should it be

Theory Nash Equilibrium and Price Discrimination Paper

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