The dominant-strategy equilibrium in a game implies that each firm:

Question

The dominant-strategy equilibrium in a game implies that each firm:​

Quizplus · Accepted Answer

In a dominant-strategy equilibrium, each firm takes the best action for itself regardless of what the other firms do. This means that each firm ignores the decisions of the other firms, making choice C the correct answer. It is worth noting that colluding with competitors to maximize industry profits would not be a dominant-strategy equilibrium, as each firm would have an incentive to cheat on the agreement to increase its own profits. Therefore, choice B is not correct. Choices A, D, and E are incorrect as well because they involve considering the reactions or information of other firms, which is not the case in a dominant-strategy equilibrium.

The Dominant-Strategy Equilibrium in a Game Implies That Each Firm:​

The Dominant-Strategy Equilibrium in a Game Implies That Each Firm: