Chrissy and Marvin are competitors in a local market and each is trying to decide if it is worthwhile to advertise. If both of them advertise, each will earn a profit of $10,000. If neither of them advertise, each will earn a profit of $20,000. If one advertises and the other doesn't, then the one who advertises will earn a profit of $30,000 and the other will earn $14,000. To earn the highest profit, Chrissy
A)should advertise, and she will earn $10,000.
B)should advertise, and she will earn $30,000.
C)should not advertise, and she will earn 20,000.
D)has no dominant strategy.

Question

Quizplus · Accepted Answer

Chrissy does not have a dominant strategy because the outcome depends on Marvin's decision. If Marvin does not advertise, Chrissy should advertise to earn $30,000. If Marvin advertises, Chrissy should not advertise to earn $14,000. Therefore, the best decision for Chrissy depends on Marvin's decision.

Chrissy and Marvin Are Competitors in a Local Market and Each