Question

Bud and Wise are the only two producers of a new type of laundry bleach designed to displace conventional laundry bleach. They are trying to figure out how much of this new bleach to produce.

The table shows the payoff matrix for the game that Bud and Wise must play. If this game is played repeatedly, ______.

A. Bud produces 20,000 bottles and Wise produces 10,000 bottles

B. Both Bud and Wise produce 20,000 bottles

C. Bud produces 10,000 bottles and Wise produces a total of 20,000 bottles

D. Both Bud and Wise produce a total of 10,000 bottles

E. Bud and Wise produce a total of 40,000 bottles, but it is impossible to know how much each firm produces

Bud and Wise are the only two producers of a new type of laundry bleach designed to displace conventional laundry bleach. They are trying to figure out how much of this new bleach to produce The table shows the payoff matrix for the game that Bud and Wise must play. If this game is played repeatedly Bud's strategies (red squares) 10,000 bottles 20,000 bottles 100,000 150,000 OA. Bud produces 20,000 bottles and Wise produces 10,000 bottles O B. both Bud and Wise produce 20,000 bottles 10,000 bottles C. Bud produces 10,000 bottles and Wise produces 20,000 bottles O D. both Bud and Wise produce 10,000 bottles 100,000 - 100,000 Wise's strategies (blue squares) E. Bud and Wise produce a total of 40,000 bottles, but it is impossible to know how much each firm produces - 100,000 20,000 bottles 150,000

Answer 1

Ans is D

If the game is played repeatedly then both Bud and Wise act cooperatively and produces 10000bottles each

If the game is played once then both would have produced 20000