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# Pint of beer

by | Aug 8, 2021 | Assignment

Bar A and Bar B are located across the street from each other, and are both deciding how much to charge for a pint of beer: \$10 or \$4. There are 100 potential customers.Of these, x are loyal customers of Bar A: they will each buy their pint of beer from Bar A, no matter what prices each bar charges. The remaining 100-x customers will buy their pint from whichever bar charges the lowest price. If both bars charge the same price, each of these 100-x customers will choose randomly between the two bars so that, on expectation, half of them will end up at each bar. Payoffs for each bar are equal to expected revenues.

1 . Dar A and Bar Bare located across the street from each other , and are both deciding how much to charge for a pint of beer : \$10 or \$1 . There are Ing potential customers.

Of these , I are loyal customers of Bar A: they will each buy their pint of beer from*Bar A, no matter what prices each bar charges. “The remaining Law _ I customers will buy their pint from whichever bar charges the lowest price. If both bars charge the same price, Each of these 10` – I customers will change randomly between the two bars so that, an expectation , half of them will end up at each bar. Parolls for Each bur are equal to expected revenues .[ a ] Fill in the payoff’s in the following table*BUT B`\$ 10\$ 10BUT A\$ 4It’s True or false: ” Both bars charging \$ 10 is a Nash equilibrium for any 100 = = = . “Provide & proof of your answer .(C ) Fill in the blank , and show your work .”If I{`_, both bars charging \$ 4 is aNash equilibrium .”