1. Gerät Gebrochen (GG) and Gerät Defektes (GD) compete against each other in the Düsseldorf home appliance market. GG and GB tacitly bargain with each other in determining prices to charge. Each firm can either price high or price low If both price high, each receives 50 MM euros. If one prices high and the other prices low, the low-priced firm receives 70 MM euros and the high-priced firm receives 30 MM euros. If both price low, each receives 40 MM euros. Both firms announce prices simultaneously and compete against each other just once. What price do GG and GD charge in the one-shot Nash equilibrium? D A. Gerät Gebrochen charges a high price and Gerät Defektes charges a high price O B. Gerät Gebrochen charges a low price and Gerät Defektes charges a high price O C. Gerät Gebrochen charges a high price and Gerät Defektes charges a low price O D. Gerät Gebrochen charges a low price and Gerät Defektes charges a low price

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1. Gerät Gebrochen (GG) and Gerät Defektes (GD) compete against each other in the Düsseldorf home
appliance market. GG and GB tacitly bargain with each other in determining prices to charge. Each firm can
either price high or price low If both price high, each receives 50 MM euros. If one prices high and the other
prices low, the low-priced firm receives 70 MM euros and the high-priced firm receives 30 MM euros. If both
price low, each receives 40 MM euros. Both firms announce prices simultaneously and compete against each
other just once. What price do GG and GD charge in the one-shot Nash equilibrium?
O A. Gerät Gebrochen charges a high price and Gerät Defektes charges a high price
B. Gerät Gebrochen charges a low price and Gerät Defektes charges a high price
C. Gerät Gebrochen charges a high price and Gerät Defektes charges a low price
D. Gerät Gebrochen charges a low price and Gerät Defektes charges a low price
Transcribed Image Text:1. Gerät Gebrochen (GG) and Gerät Defektes (GD) compete against each other in the Düsseldorf home appliance market. GG and GB tacitly bargain with each other in determining prices to charge. Each firm can either price high or price low If both price high, each receives 50 MM euros. If one prices high and the other prices low, the low-priced firm receives 70 MM euros and the high-priced firm receives 30 MM euros. If both price low, each receives 40 MM euros. Both firms announce prices simultaneously and compete against each other just once. What price do GG and GD charge in the one-shot Nash equilibrium? O A. Gerät Gebrochen charges a high price and Gerät Defektes charges a high price B. Gerät Gebrochen charges a low price and Gerät Defektes charges a high price C. Gerät Gebrochen charges a high price and Gerät Defektes charges a low price D. Gerät Gebrochen charges a low price and Gerät Defektes charges a low price
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