Question

Apple and Google are each trying to decide where to operate their new factory, Apple is choosing between Hayward, Salinas, and Ventura. Google is choosing between Berkeley, Monterrey, and Oxnard. They each make the decision simultaneously and their respective payoffs are given in the table below. Google Berkeley Monterrey Oxnard Hayward Apple: $450M Apple: $400M Apple: $325M Google: $300M Google: $200M Google: $350M Salinas Apple: $300M Apple: $500M Apple: $450M Google: $400M Google: $150M Google: $300M Ventura Apple: $200M Apple: $450M Apple: $500M Google: $250M Google: $200M Google: $350M What is Google's dominant strategy? Berkeley Monterrey Oxnard Berkeley or Oxnard Google doesn't have a dominant strategy

Answer 1

Google doesn't have a dominant strategy

(Given that Apple choose Hayward, Google's best response is Oxnard(350).
Given that Apple choose Salinas, Google's best response is Berkeley(400).
Given that Apple choose Ventura, Google's best response is Oxnard(350).
So, Google does not have a dominant strategy which is always its best response given the strategy of Apple.)