Price cutting game: This example involves two firms competing for customers. These firms can either price High or Low. The most money is made if they both price High; but if one prices Low, it can take most of the business away from the rival. If they both price Low, they make modest profits.

Firm $2$

Firm $1$

High

Low

High

$(15,15)$

$(0,25)$

Low

$(25,0)$

$(5,5)$

From firm's $1$ perspective, if Firm $2$ chooses High, the best response is to price High.

True

$$ False