Question
PAYOFF MATRIX FOR A PRICING GAME FIRM B Low Price High Price FIRM A Low Price...
PAYOFF MATRIX FOR A PRICING GAME
|
FIRM B |
|||
|
Low Price |
High Price |
||
|
FIRM A |
Low Price |
(50,000; 50,000) |
(80,000; 30,000) |
|
High Price |
(30,000; 80,000) |
(20,000; 20,000) |
From the above payoff matrix where the payoffs are the profits of the two firms, determine whether:
- Firm A has a dominant strategy. If so, what is it?
- Firm B has a dominant strategy. If so, what is it?
- The optimal strategy for each firm if there is any.
- Will a Nash equilibrium exist under this situation?
Homework Answers
Answer #1
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