The formal game theory model assumes that:
A) markets are contestable when no barriers to entry exist.
B) the dominant firm in the industry will set product price and other firms will follow.
C) each player tries to anticipate the reaction of his or her rivals when making a decision.
D) each player ignores the possible reaction of his or her rivals when making a decision.

Question

Quizplus · Accepted Answer

The formal game theory model assumes that each player tries to anticipate the reaction of his or her rivals when making a decision, as it involves strategic interactions where the outcome for each participant depends on the actions of others.

The Formal Game Theory Model Assumes That