Table 11-9
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 11-9 shows the payoff matrix for this game.
-Refer to Table 11-9.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:
Verified
Q122: A set of actions that a firm
Q125: Collusion occurs when
A)a firm chooses a level
Q128: In game theory, the three key characteristics
Q129: The study of how people make decisions
Q130: A dominant strategy is
A)an equilibrium where each
Q136: All games share three characteristics.Two of these
Q137: In economics, the study of the decisions
Q139: A situation in which each firm chooses
Q349: Table 11-9 Q354: Table 11-9
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