Figure 8.9
-Consider Figure 8.9. The outcome of the game will be that

Question

Quizplus · Accepted Answer

In a typical game theory scenario like the one described, if both players are rational and have the goal of maximizing their own payoff without the ability to collude or communicate, they often end up choosing a strategy that leads to a Nash Equilibrium. This is a situation where neither player can benefit by unilaterally changing their strategy given the strategy of the other player. In many pricing games, the Nash Equilibrium occurs when both players choose a low price because this strategy protects against losses that would occur if one chose a high price while the other chose a low price. This outcome assumes that choosing a low price guarantees some market share at a lower margin, whereas choosing a high price risks losing market share entirely if the competitor undercuts the price.

Figure 8.9 -Consider Figure 8.9. the Outcome of the Game Will Be