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Two chocolate factories, A and B, are contemplating offering discounts to the customers. The table below shows the payoff matrix in terms of profit for
Two chocolate factories, A and B, are contemplating offering discounts to the customers. The table below shows the payoff matrix in terms of profit for the two chocolate factories, with two strategies, discount or no discount. i. If both chocolate factories make a decision simultaneously, apply the game theory concept and solve for the Nash equilibrium. Explain whether this game is a prisoner's dilemma game. ii. If the game becomes a sequential game where Factory A gets to move first, construct a decision tree diagram, apply the roll-back method to solve for this sequential game
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