The payoff matrix below shows the extra profit firms X and Z will earn from two different strategies,A and B.
-Refer to the payoff matrix above.Suppose all the payoffs to strategies A and B double for both firms.The outcome of the game
A) remains the same.
B) reverses itself.
C) is a prisoner's dilemma.
D) suffers from a commitment problem.
E) may or may not change.

Question

The payoff matrix below shows the extra profit firms X and Z will earn from two different strategies,A and B. 
-Refer to the payoff matrix above.Suppose all the payoffs to strategies A and B double for both firms.The outcome of the game
A) remains the same. 
B) reverses itself. 
C) is a prisoner's dilemma. 
D) suffers from a commitment problem. 
E) may or may not change.

Quizplus · Accepted Answer

Doubling the payoffs does not change the strategic structure of the game, so the outcome remains the same.

The Payoff Matrix Below Shows the Extra Profit Firms X