Use the following to answer question:
Figure: Pricing Strategy in Cable TV Market I
-(Figure: Pricing Strategy in Cable TV Market I)Use Figure: Pricing Strategy in Cable TV Market I.In the figure,the dominant strategy for CableSouth:
A)is to advertise.
B)is not to advertise.
C)is to do whatever CableNorth does.
D)does not exist.

Question

Use the following to answer question:
Figure: Pricing Strategy in Cable TV Market I 
-(Figure: Pricing Strategy in Cable TV Market I)Use Figure: Pricing Strategy in Cable TV Market I.In the figure,the dominant strategy for CableSouth:
A)is to advertise. 
B)is not to advertise. 
C)is to do whatever CableNorth does. 
D)does not exist.

Quizplus · Accepted Answer

CableSouth does not have a dominant strategy because its best response depends on the action of CableNorth. If CableNorth advertises, CableSouth's best response is to advertise (earning $200 vs. $100). If CableNorth does not advertise, CableSouth's best response is not to advertise (earning $400 vs. $300).

Use the Following to Answer Question