The figure below presents information for a one-shot game. $\begin{array}{l}
\quad\quad\quad\quad\quad\text { Firm B }\
\text { Firm A}
\begin{array}{|l|l|l|}
\hline & \text { Low Price } & \text { High Price } \
\hline \text { Low Price } & (2,2) & (10,-8) \
\hline \text { HighPrice } & (-8,10) & (6,6) \
\hline
\end{array}\end{array}$ If this one-shot game is repeated 100 times,the Nash equilibrium payoffs of the players will be ________________ each period.
A) (2, 2)
B) (10, ?8)
C) (?8, 10)
D) (6, 6)

Question

The figure below presents information for a one-shot game. $\begin{array}{l}
\quad\quad\quad\quad\quad\text { Firm B }\
\text { Firm A}
\begin{array}{|l|l|l|}
\hline & \text { Low  Price } & \text { High Price } \
\hline \text { Low  Price } & (2,2) & (10,-8) \
\hline \text { HighPrice } & (-8,10) & (6,6) \
\hline
\end{array}\end{array}$ If this one-shot game is repeated 100 times,the Nash equilibrium payoffs of the players will be ________________ each period.
A) (2, 2)
B) (10, ?8)
C) (?8, 10)
D) (6, 6)

Quizplus · Accepted Answer

The Nash equilibrium of a one-shot game is the strategy profile that maximizes each player's payoff given the strategies of the other players. In this game, the Nash equilibrium is for both players to choose the Low Price strategy. This is because if Firm A chooses the Low Price strategy, Firm B will also choose the Low Price strategy to maximize its payoff. Similarly, if Firm A chooses the High Price strategy, Firm B will also choose the Low Price strategy to maximize its payoff. Therefore, the Nash equilibrium payoffs of the players will be (2, 2) each period.

The Figure Below Presents Information for a One-Shot Game If This One-Shot Game Is Repeated 100 Times,the Nash Equilibrium