Camp with Us and Happy Campers compete in the market for campers. Each firm must decide each season if they are going to offer special financing or not. The above payoff matrix shows each firm's net economic profit at each pair of strategies.
-Refer to the payoff matrix above. In reference to the Nash equilibrium/equilibria in this game, which of the following is true?
A)There are two Nash equilibria in this game.
B)There is one Nash equilibrium in this game.
C)There are no Nash equilibria in this game.
D)There are three Nash equilibria in this game.

Question

Camp with Us and Happy Campers compete in the market for campers. Each firm must decide each season if they are going to offer special financing or not. The above payoff matrix shows each firm's net economic profit at each pair of strategies.
-Refer to the payoff matrix above. In reference to the Nash equilibrium/equilibria in this game, which of the following is true?
A)There are two Nash equilibria in this game. 
B)There is one Nash equilibrium in this game. 
C)There are no Nash equilibria in this game. 
D)There are three Nash equilibria in this game.

Quizplus · Accepted Answer

There is only one Nash equilibrium in this game, which is (A,B). In this equilibrium, both players choose their best strategy given the other player's strategy.

Camp with Us and Happy Campers Compete in the Market