Ann Taylor and Gap are two clothing companies that must decide on the leading color palette for next season. Their sales depend on the choice of color they make as well as the choice their competitor makes
Their sales are summarized in the payoff matrix above. Using the payoff matrix A) the only Nash Equilibrium is for both companies to choose pink.
B) the only Nash Equilibrium is for both companies to choose orange.
C) the Nash Equilibrium is for one company to choose pink while the other company chooses orange.
D) there are two Nash Equilibria: either both companies choose pink or both choose orange.
A
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If an airline chooses to practice price discrimination to increase profit, it will:
a. charge higher fares to those with a more elastic demand. b. charge higher fares to those with a less elastic demand. c. determine a fare for each passenger according to the costs of serving the passenger. d. charge everyone the same fare.
Classical economists believe that ________
A) it takes a long time for economic variables to reach equilibrium B) short-run fluctuations are too infrequent and mild to be of much interest C) real variables like output and investment are not determined by nominal variables D) all of the above E) none of the above