The following provides information for a one-shot game. $\begin{array}{l}
\quad\quad\quad\quad\quad\quad\text { Firm B}\
\text { Firm A}
\begin{array}{|l|l|l|}
\hline &\text { Low Price } & \text { High Price }\
\hline & & \
\text { Low Price } & (2,2) & (10,-8)\
\hline & & \
\text { High Price } & (-8,10) & (15,15)\
\hline
\end{array}\end{array}$ What are secure strategies for firm A and firm B respectively?
A) (low price, low price)
B) (high price, low price)
C) (high price, high price)
D) Neither firm has a secure strategy.

Question

The following provides information for a one-shot game. $\begin{array}{l}
\quad\quad\quad\quad\quad\quad\text { Firm B}\
\text { Firm A}
\begin{array}{|l|l|l|} 
\hline &\text { Low Price } & \text { High Price }\
\hline & & \
\text { Low Price } & (2,2) & (10,-8)\
\hline & & \
\text { High Price } & (-8,10) & (15,15)\
\hline
\end{array}\end{array}$ What are secure strategies for firm A and firm B respectively?
A) (low price, low price)
B) (high price, low price)
C) (high price, high price)
D) Neither firm has a secure strategy.

Quizplus · Accepted Answer

A secure strategy is one that guarantees a firm a certain payoff regardless of the action of the other firm. In this case, firm A has a secure strategy of playing low price because it guarantees a payoff of 2, regardless of what firm B does. Firm B also has a secure strategy of playing low price because it guarantees a payoff of 2, regardless of what firm A does.

The Following Provides Information for a One-Shot Game What Are Secure Strategies for Firm a and Firm B