Question

Every three years, the Writers Guild of America renegotiates a Minimum Basic Agreement (MBA) with the Alliance of Motion Picture and Television Producers (AMPTP). The MBA includes agreements on basic compensation, salaries, royalties, etc., and ownership of original written material. In the fall of 2007, the Writers Guild and AMPTP were embroiled in an intense negotiation, mainly disagreeing on how writers are compensated for digital media work such as web series and online‑only content. The given payoff matrix contains the strategies and outcomes of each party in the negotiation. They could either compromise (C) or hold firm (HF) on their issues. If both parties hold firm, the Writers Guild will go on strike. The first number in each box is the Writers Guild's payoff and the second number is AMPTP's payoff. Assume that strategies are chosen independently and simultaneously.

AMPTP
Hold firm Compromise
Writers Guild Hold firm 0 , 0 10 , 3
Compromise 3 , 10 5 , 5

Required:
a. What are the Nash equilibria?
b. Writers Guild holds firm and AMPTP holds firm
c. Writers Guild compromises and AMPTP compromises
d. Writers Guild holds firm and AMPTP compromises
e. Writers Guild compromises and AMPTP holds firm

Answer 1

Answer:

Explanation:

A) Nash equilibria are: (Writers Guild Holds firm & AMPTP Compromises) & (AMPTP Holds firm & Writers Guild Compromises)

B) When AMPTP Holds firm, Writer's Guild's best strategy is Compromise since payoff is higher (3 > 0).

C) When AMPTP Compromises, Writer's Guild's best strategy is to Hold firm since payoff is higher (10 > 5).

D) When Writer's Guild Holds firm, AMPTP's best strategy is Compromise since payoff is higher (3 > 0).

E) When Writer's Guild Compromises, AMPTP's best strategy is Hold firm since payoff is higher (10 > 5).

Answer 2

This is the example of Chicken games theories.

Compromise is the greatest approach for Guild while AMPTP holds strong since the payout is bigger (3 > 0).

Guild's best tactic when AMPTP sacrifices is to hold tough because the payout is bigger (10 > 5).

Compromise is the greatest tactic for AMPTP when Guild Stands Firm since the payout is bigger (3 > 0).

When the Guild Compromises, the optimal approach for AMPTP is to Hold fast because the payout is bigger (10 > 5).

Writers Guild Maintains firm & AMPTP Concessions and AMPTP Maintains firm & Writers Guild Concessions are Nash equilibria.

Learn more:

https://brainly.com/question/13597005?referrer=searchResults