Consider the following output-choice game for two firms:

What is the outcome of the game if both firms use maximin strategies?
A) Both firms choose low output levels.
B) Both firms choose medium output levels.
C) There is no clear outcome under a maximin strategy for both firms.
D) There are two possible maximin outcomes --- Firm 1 chooses medium and Firm 2 chooses low, or Firm 1 chooses low and Firm 2 chooses medium.

Question

Consider the following output-choice game for two firms:

What is the outcome of the game if both firms use maximin strategies?
A) Both firms choose low output levels. 
B) Both firms choose medium output levels. 
C) There is no clear outcome under a maximin strategy for both firms. 
D) There are two possible maximin outcomes --- Firm 1 chooses medium and Firm 2 chooses low, or Firm 1 chooses low and Firm 2 chooses medium.

Quizplus · Accepted Answer

The Answer of Consider the following output-choice game for two firms:

What is the outcome of the game if both firms use maximin strategies?
A) Both firms choose low output levels. 
B) Both firms choose medium output levels. 
C) There is no clear outcome under a maximin strategy for both firms. 
D) There are two possible maximin outcomes --- Firm 1 chooses medium and Firm 2 chooses low, or Firm 1 chooses low and Firm 2 chooses medium.

Consider the Following Output-Choice Game for Two Firms