Table 16.6
Two firms share a common fishery. One strategy available to the firms is to fish sustainably. This maintains a healthy breeding population of fish, and keeps the price of fish relatively high. The other strategy is to overfish. This reduces the breeding population and fish prices tend to fall. The game is represented in the following table.

-Refer to Table 16-6. When this game reaches a Nash equilibrium, profits for firm A and firm B will be:

Question

Table 16.6
Two firms share a common fishery. One strategy available to the firms is to fish sustainably. This maintains a healthy breeding population of fish, and keeps the price of fish relatively high. The other strategy is to overfish. This reduces the breeding population and fish prices tend to fall. The game is represented in the following table.
 
-Refer to Table 16-6. When this game reaches a Nash equilibrium, profits for firm A and firm B will be:

Quizplus · Accepted Answer

The Nash equilibrium is where neither firm can improve its profit by changing its strategy, given the strategy of the other firm. In this case, the Nash equilibrium is for both firms to produce 5 units, which results in profits of $110 for each firm.

Table 16.6 Two Firms Share a Common Fishery. One Strategy Available to Available