Question
Refer to the following normal form game of price competition for the questions Firm B Low Price High Price [Low Price] [0] 0 [50] -10
Refer to the following normal form game of price competition for the questions
Firm B | |||
Low Price | High Price | ||
[Low Price] | [0] 0 | [50] -10 | |
[Firm A] | [High Price] | [-10] 50 | [25] 25 |
If this game is played once, then
Select a) Firm A will charge a lower price and firm B will charge a lower price as your answer | a) Firm A will charge a lower price and firm B will charge a lower price |
Select b) Firm A will charge a higher price and firm B will charge a lower price as your answer | b) Firm A will charge a higher price and firm B will charge a lower price |
Select d) Firm A will charge a higher price and firm B will charge a higher price as your answer | d) Firm A will charge a higher price and firm B will charge a higher price |
Select c) Firm A will charge a lower price and firm B will charge a higher price as your answer | c) Firm A will charge a lower price and firm B will charge a higher price |
Firm B | |||
Low Price | High Price | ||
[Low Price] | [0] 0 | [50] -10 | |
[Firm A] | [High Price] | [-10] 50 | [25] 25 |
Suppose that Firm A deviates from a trigger strategy to support a high price. What is A's payoff from cheating?
Select 25 as your answer | 25 |
Select 50 as your answer | 50 |
Select 0 as your answer | 0 |
Select -10 as your answer | -10 |
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