-Consider the noncooperative, one-time, static game depicted in Figure 2.11. Fly-by-night Airlines and Going-going-gone Airways are rival air carriers operating in the lucrative northeast corridor. Each air carrier is considering implementing a frequent-flyer program or continuing with their standard fare schedule. Which company has a dominant strategy?
A) Fly-by-night
B) Going-going-gone
C) Both airlines
D) Neither airline

Question

-Consider the noncooperative, one-time, static game depicted in Figure 2.11. Fly-by-night Airlines and Going-going-gone Airways are rival air carriers operating in the lucrative northeast corridor. Each air carrier is considering implementing a frequent-flyer program or continuing with their standard fare schedule. Which company has a dominant strategy?
A) Fly-by-night 
B) Going-going-gone 
C) Both airlines 
D) Neither airline

Quizplus · Accepted Answer

In a game where neither player has a strategy that is always the best regardless of the opponent's action, it is said that neither player has a dominant strategy. If the outcomes of implementing or not implementing a frequent-flyer program depend on the competitor's choice, and no single choice is best in all scenarios, then neither airline has a dominant strategy.

-Consider the Noncooperative, One-Time, Static Game Depicted in Figure 2