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This Question Refers to the Payoff Matrix Below Where Profits  United \text { United }

Question 38

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This question refers to the payoff matrix below where profits for United Airlines and American airlines are shown for alternative pricing strategies. The airlines can either hold prices where they are or engage in price cutting activity.


                                   United \text { United }
American hold rates cut rates hold rates  cut rates U=100U=160 A=100 A=60U=80U=70 A=150 A=70\begin{array}{l}\begin{array} { l } \\\text {American} & \text { hold rates}\\\\ & \text { cut rates}\end{array}\begin{array} { l } \hline \text { hold rates } & \text { cut rates } \\\hline \mathrm{U}=100 & \mathrm{U}=160 \\\mathrm{~A}=100 & \mathrm{~A}=60 \\\hline \mathrm{U}=80 & \mathrm{U}=70 \\\mathrm{~A}=150 & \mathrm{~A}=70\end{array}\end{array}
Does either airline have a dominant strategy? If so, what is it?

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