Table 14-4
Alpha and Beta are the only firms selling gyros in the upscale town of Delphi. Each firm must decide on whether to offer a discount to students to compete for customers. If one firm offers a discount but the other does not, then the firm that offers the discount will increase its profit. Table 14-4 shows the payoff matrix for this game.
-Refer to Table 14-4.Does Alpha have a dominant strategy and if so, what is it?
A) Yes, Alpha should offer a student discount.
B) Yes, Alpha should not offer a student discount.
C) There are two dominant strategies: if Beta offers a student discount then Alpha's best bet is to not offer a student discount, but if Beta does not offer a student discount then Alpha should offer a student discount.
D) No, there is no dominant strategy.
Correct Answer:
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Q126: A table that shows the possible payoffs
Q127: Table 14-4 Q128: In game theory, the three key characteristics Q129: The study of how people make decisions Q130: A dominant strategy is Q132: The approach economists use to analyze competition Q133: Economists use game theory to analyze oligopolies Q134: An oligopoly between two firms is called Q135: Table 14-4 Q136: All games share three characteristics.Two of these
A)an equilibrium where each
A)a
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