Two stores (A&B) want to expand their market shares by means of advertisement. The payoffs of the
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Two stores (A&B) want to expand their market shares by means of advertisement. The payoffs of the two stores are portrayed in the following table:
Store B | |||
Advertise | Do NOT Advertise | ||
Store A | Advertise | $95 million; $80 million | $305 million; $55 million |
Do NOT Advertise | $65 million; $285millions | $165 million; $115 million | |
1. What is a dominant strategy?
2. Does either store have a dominant strategy? Explain.
3. What is a Nash Equilibrium?
4. What is the payoff of each store in the Nash Equilibrium. Explain your answer!
Related Book For
Fundamentals Of Electric Circuits
ISBN: 9780073301150
3rd Edition
Authors: Matthew Sadiku, Charles Alexander
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