The mangers of Happy Campers and Camp with Us are engaged in a strategic interaction in which their interests are aligned, but there is more than one possible equilibrium. All of the following can help the managers determine the equilibrium outcome except which one?
A)the Pareto criterion
B)bargaining
C)a focal point
D)an announcement made by either firm regarding their future plans

Question

Quizplus · Accepted Answer

Bargaining does not necessarily help determine the equilibrium outcome in a situation where interests are aligned and there is more than one possible equilibrium. Instead, it is a process used to resolve conflicts of interest, which is not the scenario described. The Pareto criterion, a focal point, and announcements regarding future plans can all help in determining the equilibrium by suggesting or signaling preferred strategies or outcomes that benefit all parties involved.

The Mangers of Happy Campers and Camp with Us Are