The following payoff matrix describes a duopoly. Firm A chooses a row and Firm B chooses a column; each cell gives payoffs in the order (A, B). Which statements are true?Firm A / Firm B Advertise Do not advertise Advertise (11, 6) (16, 0) Do not advertise (7, 9) (20, 2)
(a) Firm A has no dominant strategy.
(b) Firm B has a dominant strategy.
(c) The game has a Nash equilibrium.
(d) Neither firm has a dominant strategy. Choose the correct code:
(a), (b) and (c)
If B advertises, A prefers advertising (11 > 7); if B does not, A prefers not advertising (20 > 16). Thus A has no dominant strategy. B always prefers advertising (6 > 0 and 9 > 2). Both advertising is the Nash equilibrium, with payoffs (11, 6), so (a), (b) and (c) are true.
Important Questions from Economy
When goods are produced by exploiting natural resources, it is an activity associated with:
A system in which local farmers were allowed to cultivate temporarily within a plantation is known as:
Which goods from India dominated the international textile markets before the age of mechanized industries?
Which type of farming is practiced in areas of high population pressure on land?
The major economic attribute for comparing countries is their:
