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During the height of the pandemic, many airlines substantially cut back on the number of flights offered each day. Now, as demand has increased as
During the height of the pandemic, many airlines substantially cut back on the number of flights offered each day. Now, as demand has increased as people begin travelling again, American and United are considering adding flights to their current daily schedules. The following payoff matrix describes the payoffs associated with adding flights or maintaining their current number of flights, where payoffs are listed in millions of dollars. United Airlines Increase Maintain flights Increase flights 7, 7 50 , 10 American Airlines Maintain 10 , 40 9,9 Given this scenario, which of the following best describes the likely outcome of this game? O In the unique Nash equilibrium, both airlines choose to maintain their number of flights unchanged. O In the unique Nash equilibrium, both airlines choose to increase their number of flights. O There are two Nash equilibria: (1) United increases its number of flights and American maintains its number of flights; (2) American increases its number of flights and United maintains its number of flights. O There are two Nash equilibria: (1) Both United and American increase their number of flights; (2) Both United and American maintain their number of flights unchanged. O None of the answer choices are consistent with the game's outcome
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