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United and Delta are deciding to make seats on their planes smaller or larger. The following payoff matrix specifies their profits given each combination of
United and Delta are deciding to make seats on their planes smaller or larger. The following payoff matrix specifies their profits given each combination of choices.
United
Smaller Seats Larger Seats
Delta Smaller Seats D:500 D:600
U: 500 U:300
Larger Seats D: 600 D: 800
U: 300 U: 800
a. Solve the game. Identify the Nash Equilibrium below
b. Does Delta have a dominant strategy?If so,what is it?
c. Does Unitedhave a dominant strategy?If so,what is it?
d. Is this an example of a prisoner's dilemma game? Why?
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