Question

Firm 1 and firm 2 are automobile producers. Each has the option of producing either a big car or a small car. The payoffs to each of the four possible combinations of choices are as given in the following payoff matrix. Each firm must make its choice without knowing what the other has chosen.
a. Does either firm have a dominant strategy?
b. There are two Nash equilibria for this game. Identifythem.


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  • CreatedDecember 12, 2014
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