Two firms (A and B) compete in the wireless services industry. Each firm has two possible strategies: “High Price” or “Low Price”. The payoffs associated with the different strategies are described below. Firm B High Price Low Price Firm A High Price $10 million (Firm A) $10 million (Firm B) -$4 million (Firm A) $8 million (Firm B) Low Price $8 million (Firm A) -$4 million (Firm B) $4 million (Firm A) $4 million (Firm B) Identify, if any, the dominant strategy or dominant strategies for Firm A and Firm B. (5 points) What is/are the Nash equilibrium or equilibria in this game, if any? How did you determine the Nash equilibrium or equilibria? (5 points)
Two firms (A and B) compete in the wireless services industry. Each firm has two possible strategies: “High Price” or “Low Price”. The payoffs associated with the different strategies are described below. Firm B High Price Low Price Firm A High Price $10 million (Firm A) $10 million … Read more