When there is no Equilibrium (or no Nash Equilibrium),we expect that:
A) the firms end up in the cooperative strategy.
B) a firm will follow a randomized strategy.
C) a firm will not care what it does.
D) a firm will very likely have a dominant strategy.

Question

Quizplus · Accepted Answer

When there is no Equilibrium (or no Nash Equilibrium), a firm may choose to follow a randomized strategy in order to avoid the risk of making a predictable move that could be exploited by the other firm. This can help them achieve a better outcome than choosing a deterministic strategy. The other options are less likely outcomes and may not lead to the best result for the firm.

When There Is No Equilibrium (Or No Nash Equilibrium),we Expect