Gary's Gas and Frank's Fuel are the only two providers of gasoline in their town.Gary and Frank decide to form a cartel.Later,Gary summarizes his pricing strategy as,"I'll cheat on the cartel because,regardless of what Frank does,cheating gives me the best payoff." This is an example of:

Question

Quizplus · Accepted Answer

A dominant strategy is a strategy that provides the best payoff for a player, regardless of the other player's strategy. In this case, Gary believes that cheating gives him the best payoff, regardless of what Frank does. Therefore, cheating is his dominant strategy.

Gary's Gas and Frank's Fuel Are the Only Two Providers