Two local Madison car dealerships, Badger Cars Inc. and Dane Cars Inc., are competing and both are thinking of introducing new pricing strategies for their cars due to recent changes in the market. Each dealership will decide to set a price to either: Inflation Price, Holiday Price, or Covid Price. The dealerships will make these pricing strategy decisions at the same time and their payoffs for each strategy and dealership is given by the following table. The payoffs here are given in the form of profit. Badger Cars Inc. Holiday Price 0 Inflation Price -10,-10 Covid Price Inflation Holiday Covid Price Price Price Dane Cars Inc. 10,0 20, 10 0,10 -20, -20 15, -5 10, 20 -5,15 -30, -30 Question: Please select all Nash equilibria that exist in this game. Badger Cars Inc. chooses Inflation Price, Dane Cars Inc., chooses Holiday Price Badger Cars Inc. chooses Inflation Price, Dane Cars Inc. chooses Inflation Price Badger Cars Inc. chooses Inflation Price, Dane Cars Inc. chooses Covid Price Badger Cars Inc. chooses Holiday Price, Dane Cars Inc. chooses Inflation Price Badger Cars Inc. chooses Covid Price, Dane Cars Inc. chooses Covid Price O Badger Cars Inc. chooses Covid Price, Dane Cars Inc. chooses Inflation Price SALAM simbing
Two local Madison car dealerships, Badger Cars Inc. and Dane Cars Inc., are competing and both are thinking of introducing new pricing strategies for their cars due to recent changes in the market. Each dealership will decide to set a price to either: Inflation Price, Holiday Price, or Covid Price. The dealerships will make these pricing strategy decisions at the same time and their payoffs for each strategy and dealership is given by the following table. The payoffs here are given in the form of profit. Badger Cars Inc. Holiday Price 0 Inflation Price -10,-10 Covid Price Inflation Holiday Covid Price Price Price Dane Cars Inc. 10,0 20, 10 0,10 -20, -20 15, -5 10, 20 -5,15 -30, -30 Question: Please select all Nash equilibria that exist in this game. Badger Cars Inc. chooses Inflation Price, Dane Cars Inc., chooses Holiday Price Badger Cars Inc. chooses Inflation Price, Dane Cars Inc. chooses Inflation Price Badger Cars Inc. chooses Inflation Price, Dane Cars Inc. chooses Covid Price Badger Cars Inc. chooses Holiday Price, Dane Cars Inc. chooses Inflation Price Badger Cars Inc. chooses Covid Price, Dane Cars Inc. chooses Covid Price O Badger Cars Inc. chooses Covid Price, Dane Cars Inc. chooses Inflation Price SALAM simbing
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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