Question
Two shops A and B selling Toys.Both has to decide to charge $1 or $2.The payoff matrix in profit is: (a) Identify the dominant strategy
Two shops A and B selling Toys.Both has to decide to charge $1 or $2.The payoff matrix in profit is:
(a) Identify the dominant strategy for both shops.
(b) Solve for the equilibrium.
(c) Is this game a prisoner's dilemma game? Explain.
(d) If this game is played many times, what should both shops do?
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Principles of Economics
Authors: Gregory Mankiw
7th edition
128516587X, 978-1285165875
