
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 Beta have a dominant strategy and if so, what is it?
A) Yes, Beta should offer a student discount.
B) Yes, Beta should not offer a student discount.
C) There are two dominant strategies: if Alpha offers a student discount then Beta's best bet is to not offer a student discount, but if Alpha does not offer a student discount then Beta should offer a student discount.
D) No, there is no dominant strategy.
Correct Answer:
Verified
Q119: A cartel is
A)a temporary storage facility for
Q120: A member of a cartel like OPEC
Q121: Game theory was developed in the 1940s
Q122: A set of actions that a firm
Q123: Table 14-4 Q125: Collusion occurs when Q126: A table that shows the possible payoffs
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A)a firm chooses a level
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