Connor's Corner Gas and Steven's Super Fuel are the only two providers of gasoline in their town. Connor and Steven decide to cooperate. Later, Connor summarizes his pricing strategy as, "I'll defect because, regardless of what Steven does, defecting gives me the best payoff." This is an example of:
A)a best response.
B)a tit-for-tat response.
C)an irrational response.
D)product differentiation.

Question

Quizplus · Accepted Answer

Connor's statement of choosing to defect regardless of Steven's move indicates that his decision is based on the best response strategy. This means that Connor is making a rational choice by doing what benefits him the most, given what he expects Steven to do.

Connor's Corner Gas and Steven's Super Fuel Are the Only