Dell and HP must both simultaneously prices for their new laptops.They can both either choose to set a Low or High price.The payoffs are as follows.If both firms set a Low price, Dell gets 3 and HP 7.If both firms set a High price, the payoffs are 6 to Dell and 3 to HP.If Dell sets a High price and HP chooses Low, the payoffs are 8 to Dell and 6 to HP.If Dell sets a Low price and HP opts for High, the payoffs are 7 to Dell and 2 to H.What is the Nash equilibrium?
A)(Low, High), where the first strategy is Dell's and the second HP's.
B)(High, Low), where the first strategy is Dell's and the second HP's.
C)(High, High), where the first strategy is Dell's and the second HP's.
D)(Low, Low), where the first strategy is Dell's and the second HP's.
E)None of the above.

Question

Quizplus · Accepted Answer

In the (High, Low) strategy, neither Dell nor HP can unilaterally change their strategy to improve their payoff, making it a Nash equilibrium.

Dell and HP Must Both Simultaneously Prices for Their New