Table 11.1 Godrickporter and Star Connections are the only two airport shuttle and limousine rental service companies in the mid-sized town of Godrick Hollow.Each firm must decide on whether to increase its advertising spending to compete for customers.Table 11.1 shows the payoff matrix for this advertising game.
-Refer to Table 11.1.Is there a dominant strategy for Star Connections and, if so, what is it?

Question

Table 11.1  Godrickporter and Star Connections are the only two airport shuttle and limousine rental service companies in the mid-sized town of Godrick Hollow.Each firm must decide on whether to increase its advertising spending to compete for customers.Table 11.1 shows the payoff matrix for this advertising game.
-Refer to Table 11.1.Is there a dominant strategy for Star Connections and, if so, what is it?

Quizplus · Accepted Answer

There is no dominant strategy for Star Connections as the outcome depends on what Godrickporter does. The best strategy for both companies may be to collude and agree not to increase their advertising spending to avoid a price war that would ultimately harm both firms.

Table 111 Godrickporter and Star Connections Are the Only Two