Using the following payoff table for Hardaway Corporation and Paxton Industries. These two firms must make simultaneous pricing decisions. They can choose low, medium, or high prices. The payoffs given are in thousands of dollars of profit per month.
$\begin{array} { l }
&\text { Paxton Industries }\
\text {Hardaway Corp. }&\begin{array}{l|lc|ll|ll|}
&{\text { Low }} && {\text { Medium }} && {\text { High }} \
\hline\text {Low }& \text { A } & & \mathrm{B} & & \mathrm{C} & \
&& \$ 30, \$ 30 & & \$ 45, \$ 20 & & \$ 32, \$ 20 \
\hline \text {Medium }&\text { D } & & \mathrm{E} & & \mathrm{F} & \
&& \$ 20, \$ 45 & & \$ 40, \$ 40 & & \$ 45, \$ 35 \
\hline \text {High }&\mathrm{G} & & \mathrm{H} & & \mathrm{I} & \
&& \$ 15, \$ 48 & & \$ 38, \$ 52 & & \$ 50, \$ 50 \
\hline
\end{array}\
&\text { Payoffs in thousands of dollars of monthly profits. }\\end{array}$
-After the first round of eliminating dominated strategies for both firms,

Question

Using the following payoff table for Hardaway Corporation and Paxton Industries. These two firms must make simultaneous pricing decisions. They can choose low, medium, or high prices. The payoffs given are in thousands of dollars of profit per month.
 $\begin{array} { l  } 
 &\text {  Paxton Industries }\
 \text {Hardaway Corp. }&\begin{array}{l|lc|ll|ll|}
&{\text { Low }} && {\text { Medium }} && {\text { High }} \
\hline\text {Low }& \text {  A } & & \mathrm{B} & & \mathrm{C} & \
&& \$ 30, \$ 30 & & \$ 45, \$ 20 & & \$ 32, \$ 20 \
\hline \text {Medium }&\text { D } & & \mathrm{E} & & \mathrm{F} & \
&& \$ 20, \$ 45 & & \$ 40, \$ 40 & & \$ 45, \$ 35 \
\hline \text {High }&\mathrm{G} & & \mathrm{H} & & \mathrm{I} & \
&& \$ 15, \$ 48 & & \$ 38, \$ 52 & & \$ 50, \$ 50 \
\hline
\end{array}\
 &\text { Payoffs in thousands of dollars of monthly profits. }\\end{array}$
-After the first round of eliminating dominated strategies for both firms,

Quizplus · Accepted Answer

The payoff table shows that Paxton Industries will always get a higher payoff by setting a medium price, regardless of what Hardaway Corporation does. Therefore, setting a low or high price is dominated by setting a medium price for Paxton Industries. For Hardaway Corporation, setting a high price is dominated by setting a medium price, because Paxton Industries will always get a higher payoff by setting a medium price if Hardaway Corporation sets a high price. Therefore, the only remaining strategies for Hardaway Corporation are setting a low price or a medium price.

Using the Following Payoff Table for Hardaway Corporation and Paxton