59) A game in which each player adopts its dominant strategyA) could result in a Nash equilibrium.B) will not lead to an equilibrium.C) can never result in a Nash equilibrium.D) must be a cooperative game.59)Answer: A
Diff: 2Page Ref: 464/464Topic: Business StrategyLearning Outcome: Micro 16: Discuss the functions of cooperation, competition, and public policies inoligopoliesAACSB: Reflective ThinkingTable 14-2Table 14-2 shows the payoff matrix for Wal-Mart and Target from every combination of pricing strategies for the popularPlayStation 3. At the start of the game each firm charges a low price and each earns a profit of $7,000.60)Refer to Table 14-2.Is the current strategy in which each firm charges the low price and earns aprofit of $7,000 a Nash equilibrium? If not, why and what is the Nash equilibrium?
Diff: 2Page Ref: 464/464Topic: Nash EquilibriumLearning Outcome: Micro 16: Discuss the functions of cooperation, competition, and public policies inoligopoliesAACSB: Analytic Skills16