Multiple Choice
-Consider the game depicted in Figure 13.7 Payoffs are in millions of dollars. Suppose that if firm A charges a high price there is a 25 percent chance that firm B will charge a high price and an 75 percent chance that firm B will charge a low price. If firm A charges a low price there is an 75 percent change that firm B will charge a high price and a 25 percent chance that firm B will charge a low price. What is the riskier strategy profile for firm A?
A) {High price 6 High price}
B) {High price 6 Low price}
C) {Low price 6 High price}
D) {Low price 6 Low price}
Correct Answer:
Verified
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