Two firms play the game below. Each must choose strategy 1 or 2. They choose their strategies simultaneously and without cooperating with each other. Firm A 's payoffs are on the left side of each cell, and Firm B 's payoffs are on the right.

Firm A/Firm B Strategy 1 Strategy 2

Strategy 1 10, 16 8, 12

Strategy 2 13, 12 17, 10

Determine the dominant strategy for each firm. 1) For Firm A : A. Strategy 1 is a dominant strategyB. Strategy 2 is a dominant strategyC. Neither strategy is the dominant strategy

Question

Mathematics

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30 October, 23:54

Two firms play the game below. Each must choose strategy 1 or 2. They choose their strategies simultaneously and without cooperating with each other. Firm A 's payoffs are on the left side of each cell, and Firm B 's payoffs are on the right.

Firm A/Firm B Strategy 1 Strategy 2

Strategy 1 10, 16 8, 12

Strategy 2 13, 12 17, 10

Determine the dominant strategy for each firm. 1) For Firm A : A. Strategy 1 is a dominant strategyB. Strategy 2 is a dominant strategyC. Neither strategy is the dominant strategy

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Answers (1)

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Wilson Dunlap · Answer 1

B. Strategy 2 is a dominant strategy

Step-by-step explanation:

A strategy can be considered a dominant strategy for a player if that player gets the best payoff yields no matter what strategies the other players choose. Going by the question, Firm A getting an overall payoff of 30 from Strategy 2 as compared to 18 from Strategy 1.

Therefore Strategy 2 is a dominant strategy