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14.5. In the Castorian Airline market, there are only two firms. Each firm is deciding whether to offer a fre- quent flyer program. The annual
14.5. In the Castorian Airline market, there are only two firms. Each firm is deciding whether to offer a fre- quent flyer program. The annual profits (in millions of dollars) associated with each strategy are summarized in the following table (where the first number 1s the payotf to Airline A and the second to Airline B): Airline B No Frequent With Frequent Flyer Flyer Program Program With Frequent Airline Flyer Program A 200, 160 340, 80 No Frequent Flyer Program 160, 280 240, 200 a) Does either player have a dominant strategy? Explain. b) Is there a Nash equilibrium in this game? If so what 1S 1t? c) Is this game an example of the prisoners' dilemma? Explain
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