1. The table below shows expected payoffs (ir $billions) for GM and the United Auto Workers (UAW) as they enter contract negotiations. Strike GM UAW Concede Bargain Hard -20, -10 10, -15 Concede -10, -2 15, 0 a. Using game theory for a one-shot, simultaneous decision game, find all the Nash equilibria. b. Each side enters negotiations threatening to take a hard line (Bargain Hard or Strike). How credible are each of these threats and why (briefly)?

1. The table below shows expected payoffs (ir $billions) for GM and the United Auto Workers (UAW) as they enter contract negotiations. Strike GM UAW Concede Bargain Hard -20, -10 10, -15 Concede -10, -2 15, 0 a. Using game theory for a one-shot, simultaneous decision game, find all the Nash equilibria. b. Each side enters negotiations threatening to take a hard line (Bargain Hard or Strike). How credible are each of these threats and why (briefly)?

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter8: Game Theory

Section: Chapter Questions

Problem 8.9P

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