In the following matrix for the profits of two pizza firms with the decision whether or not to offer “free delivery” what is the dominant outcome. Explain why. You deliver You don’t deliver Rival delivers Rival gets $3000 You get $3000 Rival gets $8000 You get $2000 Rival doesn’t deliver Rival gets $2000 You get $8000 Rival gets $6000 You get $6000
In the following matrix for the profits of two pizza firms with the decision whether or not to offer “free delivery” what is the dominant outcome. Explain why. You deliver You don’t deliver Rival delivers Rival gets $3000 You get $3000 Rival gets $8000 You get $2000 Rival doesn’t deliver Rival gets $2000 You get $8000 Rival gets $6000 You get $6000
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
In the following matrix for the profits of two pizza firms with the decision whether or not to offer “free delivery” what is the dominant outcome. Explain why.
|
You deliver |
You don’t deliver |
Rival delivers |
Rival gets $3000 You get $3000 |
Rival gets $8000 You get $2000
|
Rival doesn’t deliver |
Rival gets $2000 You get $8000 |
Rival gets $6000 You get $6000
|
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