29. Using a payoff matrix to determine the equilibrium outcome Suppose there are only two firms that sell smartphones, Flashfone and Pictech. The payoff matrix that follows shows the profit (in millions of dollars) each company will earn, depending on whether it sets a high or low price for its phones. For example, the lower-left cell shows that if Flashfone prices low and Pictech prices high, Fashfone will earn a profit of $8 million and Pictech will earn a profit of $4 million Assume this is a simultaneous game and that Flashfone and Pictech are both profit-maximizing firms. Pictech High Price Low Price 6.6 43 14 5.5 Flashuone High Price Low Price Fashion prices high, Pictech will make more profit if it chooses a choose price price, and if Flashfone prices low, Pictech will make more profit if it I pictech prices high, Flash one will make more profit if it chooses a cho price. price, and if Pictech prices low, Flashfone will make more profit if it Considering to the information given, pricing high a dominant strategy for both Rashfone and Pictech price, and if Rashfone prices low, Pictech will make more profit if it If Flashfone prices high, Pictech will make more profit if it chooses a chooses a price. IF Pictech prices high, Hashfone will make more profit if it chooses a chooses a price. price, and if Pictech prices low, Flashfone will make more profit if it Considering all of the information given, pricing high a dominant strategy for both Flashfone and Pictech. If the firms do not collude, what strategies will they end up choosing? Both Rashfone and Pletech will choose a high price. Flashfone will choose a low price and pictech will choose a high price. Both Flashtone and Plcech will choose a low price Fashione will choose a high price and Pictech will choose a low price True or Fals: The game between Mashtone and Pictech is an example of the pedonere dilemma True