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

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

Section: Chapter Questions

Problem 1QTC

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