The payoff matrix below shows the daily profit for two firms, Row Restaurant and Column Cafe, for two different strategies, publishing coupons in the student paper and not publishing coupons in the student paper.
The payoffs of this game are such that:
A. both firms would benefit from a law that made publishing coupons illegal.
B. an agreement not to publish coupons would be easy to maintain because neither firm has an incentive to defect.
C. profit at each firm is higher when they both follow their dominant strategy than when they both follow their dominated strategy.
D. if Row Restaurant expects Column Cafe to choose its dominant strategy, then Row Restaurant should choose its dominated strategy.
Answer: A
You might also like to view...
Refer to Figure 18.3. In autarky, the maximum amount of scooters that Livonia can produce is
A) 120. B) 100. C) 80. D) 40.
Which of the following would not be a central issue in economics?
a. Who produces the goods? b. How is production carried out? c. Who consumes what? d. What goods are produced? e. When are goods consumed and produced?
Which of the following could create a cost advantage for a? monopoly?
A) better technology B) lower friction due to better organization C) standardization D) All of the above
Among countries with Per Capita GDP in 2004 of less than $2,000, the opportunity cost of increased education and literacy for young workers might be measured as
A. increased investment in improved infrastructure. B. increased consumption among the educated elites. C. new palaces and more soldiers for the ruling party. D. shortages of food or health care for the poor.