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.
Assuming both companies are fully rational and informed about all the payoffs in this game, explain fully for each company whether it has a dominant strategy. Write down all the dominant strategies that exist in the game
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