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Use the following Payoff Matrix for Company A and Company B, the only two companies that produce widgets, to answer the following questions. Your
Use the following Payoff Matrix for Company A and Company B, the only two companies that produce widgets, to answer the following questions. Your response should be at least 150-225 words (2-3 paragraphs) in length. Be sure to reference at least one scholarly source to support your answer. a. What is the expected outcome of this one-time (not repeated) game? Defend your answer. b. How might your answer change if the game is repeated indefinitely? c. To what extent does this example illustrate why firms in some concentrated oligopolies exhibit cooperative or collusive behavior even though they don't explicitly collude? Company B Lowers Price Company B Does Not Lower Price Company A Lowers Price Company B's Payoff: $100 Company B's Payoff: -$100 Company A's Payoff: $100 Company A's Payoff: $1000 Company A Does Not Lower Price Company B's Payoff: $1000 Company B's Payoff: $500 Company A's Payoff: -$100 Company A's Payoff: $500
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