Homework Answers
a) Yes, the dominant strategy in the market is to set a lower price, that will ensure a payoff of 100 or 600 depending on the other firms strategy that is higher than 50 and 500 other wise,
b) Yes, this is a priosners dilemma as the firms that are cooperating will be getting more than the firms that are not cooperating. co operating outcome in the game is 500 each and the non coperative outcome is 100 each.
c) If they co operate there is an incentive to cheat as the one cheating will make a higher profit that is 600.
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Drop Down Menu Options:
1) high/low
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4) high/low
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BBlank answer choices:
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2. (High, Low)
3. (High, Low)
4. (High, Low)
5. (Is, Is not)
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2) high/low
3) high/low
4) high/low
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BBlank answer choices:
1. (High, Low )
2. (High, Low)
3. (High, Low)
4. (High, Low)
5. (Is, Is not)
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