Question
Vaxiboost is a new, generic pharmaceutical product sold by Sanitex and Toptabs. Both are considering their pricing decisions for the next year. Payoffs under different
Vaxiboost is a new, generic pharmaceutical product sold by Sanitex and Toptabs. Both are considering their pricing decisions for the next year. Payoffs under different combinations of decisions are as follows:
If both Sanitex and Toptabs price high, both will receive profits of 3m in the coming year.
If Sanitex prices high and Toptabs prices low, Sanitex will receive profits of 0.7m and Toptabs will receive profits of 6m.
If Sanitex prices low and Toptabs prices high, Sanitex receceive profits of 5m and Toptabs will receive profits of 2m.
If both Sanitex and Toptabs price low, both will receive profits of 0.1m.
- Draw a payoff matrix to show this information as a simultaneous one-shot game in which each pharmaceutical company has to make a decision without knowing what the other will do.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started