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Consider the following game: Ray-Ban and Oakley are the only two firms in the market for sunglasses. Each firm can choose to charge high prices
Consider the following game: Ray-Ban and Oakley are the only two firms in the market for sunglasses. Each firm can choose to charge high prices or low prices. In the following payoff matrix, the first entry in the brackets is the payoffs (in $million) of Ray-Ban and the second entry is the payoffs of Oakley. What will the dominant strategies of Ray-Ban and Oakley be, and what will the Nash equilibrium be? Explain your answers in detail.
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