Company Tau and Company Upsilon are the only sellers of a good with no close substitutes. They
Fantastic news! We've Found the answer you've been seeking!
Question:
Company Tau and Company Upsilon are the only sellers of a good with no close substitutes. They are each considering whether to increase their store hours. They project the following daily profit payoff scenarios:
Company Upsilon | |||
---|---|---|---|
Company Tau | Increase Store Hours | Keep Current Hours | |
Increase Store Hours | $640, $850 | $450, $350 | |
Keep Current Hours | $550, $550 | $650, $260 |
- Does Company Tau have a dominant strategy to increase store hours, maintain their current hours, or no dominant strategy?
- Does Company Upsilon have a dominant strategy to increase store hours, maintain their current hours, or no dominant strategy?
- Assuming no cooperation, what will the profit be for each firm?
- A local ordinance requires overtime pay amounting to $100 if the companies increase their hours. Draw a new payoff matrix reflecting the cost increase.
- Assuming no cooperation, what will the profit be for each firm after the cost increase?
Related Book For
Posted Date: