Which of the Following Conditions Correctly Describes a Nash Equilibrium

question 63

Multiple Choice

Which of the following conditions correctly describes a Nash equilibrium when two firms are in the market?

• A) π₁(s₁^*, s₂^*) ≥ π₁(s₁, s₂^*) for all s₁.
• B) π₁(s₁^*, s₂^*) ≥ π₁(s₁, s₂^*) for all s₁ and π₂(s₁^*, s₂^*) ≥ π₂(s₁^*, s₂) for all s₂.
• C) π₁(s₁^*, s₂^*) ≥ π₂(s₁, s₂^*) for all s₁ and π₂(s₁^*, s₂^*) ≥ π₁(s₁^*, s₂) for all s₂.
• D) π₁(s₁, s₂^*) ≥ π₂(s₁^*, s₂^*) for all s₁ and π₂(s₁^*, s₂) ≥ π₁(s₁^*, s₂^*) for all s₂.

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Definitions:

Conditioned Stimulus

A stimulus that was once neutral but, after being paired with the unconditioned stimulus, gradually induces a conditioned response.

Aplysia

A genus of sea slugs that are often used in neurological research due to their simple, large nerve cells.

Squirt

To eject liquid in a thin, fast stream through a narrow opening.

Classical Conditioning

A learning paradigm where two stimuli are unceasingly linked; initially, the response is triggered by the second stimulus, but with time, it is triggered by the first stimulus alone.