Refer to the normal-form game of advertising shown below. Suppose there is a 20 percent chance that the advertising game depicted in Figure 10-17 will end next period. What is the present value to firm B of cheating on the collusive strategy {do not advertise, do not advertise}?
A) $0
B) $10
C) $125
D) $175

Question

Refer to the normal-form game of advertising shown below.  Suppose there is a 20 percent chance that the advertising game depicted in Figure 10-17 will end next period. What is the present value to firm B of cheating on the collusive strategy {do not advertise, do not advertise}?
A) $0 
B) $10 
C) $125 
D) $175

Quizplus · Accepted Answer

The Answer of Refer to the normal-form game of advertising shown below.  Suppose there is a 20 percent chance that the advertising game depicted in Figure 10-17 will end next period. What is the present value to firm B of cheating on the collusive strategy {do not advertise, do not advertise}?
A) $0 
B) $10 
C) $125 
D) $175

Refer to the Normal-Form Game of Advertising Shown Below