Two children have two lollipops each. Each child can observe his or her own strength but not the other child’s strength, where each child’s strength is uniformly distributed between 0 and 1. The two children simultaneously decide whether or not to quarrel. If at least one child decides to quarrel, then the stronger child gets all four lollipops and the weaker child gets none. If neither child wants to quarrel, they each end up with two lollipops.

a. Formulate this situation as a Bayesian game.
b. Find all Nash equilibria of this game.
c. How would your answer to (b) change if one of the lollipops is destroyed when the children quarrel, such that the stronger child only gets three?
d. How would your answer to (b) change if child A decides first whether to quarrel or not, then child B, observing A’s choice, chooses whether to quarrel or not? (Again, a quarrel happens if and only if at least one child chooses to quarrel.)

Afreelance​ singer-songwriter is planning the restoration of a recently purchased civil​ war-era farmhouse. while he professes an enjoyment​ of, and talent in the construction​ trades, the theory of comparative advantage implies that a. the value of what he imports​ (in this​ case, professional contractor​ services) must equal the value of what he exports​ (songs). b. he should concentrate on the restoration work since his​ out-of-pocket costs will be much lower than if he hires professionals. c. ​self-sufficiency is​ advantageous, hence he should split his time between music and construction. d. the income lost while away from music will likely exceed the savings realized by doing the work​ himself, thus, he should hire professionals to do the restoration work. e. he ought to do as much of the work himself as possible since imports​ (in this​ case, professional contractor​ services) should always be restricted to those things that cannot be done internall

Exercise 18-15 sheffield appliance center is an experienced home appliance dealer. sheffield appliance center also offers a number of services for the home appliances that it sells. assume that sheffield appliance center sells ovens on a standalone basis. sheffield appliance center also sells installation services and maintenance services for ovens. however, sheffield appliance center does not offer installation or maintenance services to customers who buy ovens from other vendors. pricing for ovens is as follows. oven only $790 oven with installation service 850 oven with maintenance services 970 oven with installation and maintenance services 990 in each instance in which maintenance services are provided, the maintenance service is separately priced within the arrangement at $180. additionally, the incremental amount charged by sheffield appliance center for installation approximates the amount charged by independent third parties. ovens are sold subject to a general right of return. if a customer purchases an oven with installation and/or maintenance services, in the event sheffield appliance center does not complete the service satisfactorily, the customer is only entitled to a refund of the portion of the fee that exceeds $790. assume that a customer purchases an oven with both installation and maintenance services for $990. (b) indicate the amount of revenue that should be allocated to the oven, the installation, and to the maintenance contract.

What is the relationship among market segmentation, target markts, and consumer profiles?