(Table) Referring to the payoff matrix for Norm and Pete (with Norm's profit in plain text and Pete's profit in italics), what is the MOST likely outcome of this noncooperative game?
$\begin{array}{c}
\quad \quad \quad \quad \quad \quad \quad \text { Pete's Pasta Dinners } \
\begin{array}{|l|l|ll|ll|}
\hline & & {\text { High Price }} & &{\text { Price }} \
\hline \text {Norm's Noodle Bowls } & \text { High Price } & \$ 4,000 & \$ 4,500 & \$ 700 & \$ 3,500 \
\hline &\text { Low Price } & \$ 2,800 & \$ 500 & \$ 3,000 & \$ 3,700 \
\hline
\end{array}\end{array}$
A) Both charge a high price.
B) Both charge a low price.
C) Norm charges a high price and Pete charges a low price.
D) Pete charges a high price and Norm charges a low price.

Question

(Table) Referring to the payoff matrix for Norm and Pete (with Norm's profit in plain text and Pete's profit in italics), what is the MOST likely outcome of this noncooperative game?
$\begin{array}{c}
 \quad  \quad  \quad  \quad  \quad  \quad  \quad \text { Pete's Pasta Dinners } \
\begin{array}{|l|l|ll|ll|}
\hline & & {\text { High Price }} & &{\text { Price }} \
\hline \text {Norm's Noodle  Bowls } & \text { High Price } & \$ 4,000 & \$ 4,500 & \$ 700 & \$ 3,500 \
\hline  &\text { Low Price } & \$ 2,800 & \$ 500 & \$ 3,000 & \$ 3,700 \
\hline
\end{array}\end{array}$
A) Both charge a high price.
B) Both charge a low price.
C) Norm charges a high price and Pete charges a low price.
D) Pete charges a high price and Norm charges a low price.

Quizplus · Accepted Answer

In a noncooperative game, each player aims to maximize their own payoff. If both charge a low price, Norm earns $3,000 and Pete earns $3,700, which is better for both compared to other outcomes.

(Table) Referring to the Payoff Matrix for Norm and Pete