The Home Depot, Inc., and the Lowes Companies are locked in a vicious struggle for market share in the home improvement market. Suppose each competitor is considering the advisability of offering 90-day free financing as a means for boosting sales during the important spring season. The Home Depot can choose either row in the payoff matrix defined below, whereas the Lowes Companies can choose either column. Neither firm can unilaterally choose a give cell in the payoff matrix. The ultimate result of this one-shot, simultaneous-move game depends upon the choices made by both competitors. The first number in each cell is the profit payoff to the Home Depot; the second number is the profit payoff to the Lowes Companies.

A. Is there a secure strategy for The Home Depot? If so, what is it?
B. Is there a secure strategy for The Lowes Companies? If so, what isit?

  • CreatedFebruary 13, 2015
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