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corie corie
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Posts: 767
5 years ago
Joanna has a credit card account with Card Bank.  Card Bank's available strategies are tp raise Joanna's credit card interest rate or do nothing.  Joanna's available strategies are to transfer her Card Bank account balance to another creditor or do nothing.  If Card Bank raises Joanna's interest rate and Joanna does nothing, Card Bank increases profits by $1,000 while Joanna receives -$1,000.  If Card Bank raises Joanna's interest rate and Joanna transfers her account to another creditor, Card Bank receives -$300 while Joanna receives -$100.  If Card Bank does nothing and Joanna does nothing, each player receives $0.  If Card Bank does nothing and Joanna transfers her account to another creditor, Card Bank receives -$300 while Joanna receives -$150.  Diagram the game tree for this sequential game.  Indicate any Nash equilibria.
Textbook 

Microeconomics


Edition: 8th
Author:
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oracledarrenoracledarren
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Posts: 455
5 years ago
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More solutions for this book are available here
The Nash equilibrium is for both players to choose the "Do Nothing" strategy.  The game tree is indicated below.
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1 months ago
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