Firm B 0-50 0-10 0-5 Concede that cigarette smoke causes lung cancer 0-20 Firm A Concede that cigarette Argue that there is no smoke causes lung evidence that smoke cancer causes cancer Firm A profit=-$20 b Firm B profit=-$15 b If both firms follow a dominant strategy. Firm A's profits (losses) will be Fim A profit= 550 6 Fm B profit = $5 b Argue that there is no Firm A profit=-$5b Firm A proft = $10 6 evidence that smoke Firm B profit=-550 b Fim B profit=$106 causes cancer

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
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Firm B
0 -50
0-10
0-5
Concede that
cigarette smoke
causes lung cancer
Q-20
Firm A
Concede that cigarette
Argue that there is no
smoke causes lung evidence that smoke
cancer
causes cancer
Firm A profit=-$20 b
Firm B profit=-$15 b
If both firms follow a dominant strategy. Firm A's profits (losses) will be
Firm A profit=-550 b
Firm B profit= 55 b
Argue that there is no Firm A profit=-$5 b Firm A profit = $106
b
evidence that smoke
Firm B profit=-$50 b Fim B profit=$10&
causes cancer
response
Transcribed Image Text:Firm B 0 -50 0-10 0-5 Concede that cigarette smoke causes lung cancer Q-20 Firm A Concede that cigarette Argue that there is no smoke causes lung evidence that smoke cancer causes cancer Firm A profit=-$20 b Firm B profit=-$15 b If both firms follow a dominant strategy. Firm A's profits (losses) will be Firm A profit=-550 b Firm B profit= 55 b Argue that there is no Firm A profit=-$5 b Firm A profit = $106 b evidence that smoke Firm B profit=-$50 b Fim B profit=$10& causes cancer response
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