The table below shows the payoff (profit) matrix of Firm A and Firm B indicating the profit outcome that corresponds to each firm's pricing strategy (where $500 and $200 are the pricing strategies of two firms).Table 12.2

-An efficient way to move toward the Nash equilibrium is called:
A)an agreement.
B)a convention.
C)a principle.
D)a resolution.
E)a convergence.

Question

The table below shows the payoff (profit) matrix of Firm A and Firm B indicating the profit outcome that corresponds to each firm's pricing strategy (where $500 and $200 are the pricing strategies of two firms).Table 12.2
 
-An efficient way to move toward the Nash equilibrium is called:
A)an agreement. 
B)a convention. 
C)a principle. 
D)a resolution. 
E)a convergence.

Quizplus · Accepted Answer

A convention is an established practice or method that helps players in a game coordinate their strategies to reach a Nash equilibrium.

The Table Below Shows the Payoff (Profit) Matrix of Firm