Table 17-25
There are just two producers of a certain product. Each is considering offering promotional discounts.
-Refer to Table 17-25. The dominant strategy
A)for both firms is to offer the discount.
B)for both firms is to not offer the discount.
C)for firm A is to offer the discount. The dominant strategy for firm B is to not offer the discount.
D)for firm A is to not offer the discount. The dominant strategy for firm B is to offer the discount.

Question

Table 17-25
There are just two producers of a certain product. Each is considering offering promotional discounts. 
-Refer to Table 17-25. The dominant strategy
A)for both firms is to offer the discount. 
B)for both firms is to not offer the discount. 
C)for firm A is to offer the discount. The dominant strategy for firm B is to not offer the discount. 
D)for firm A is to not offer the discount. The dominant strategy for firm B is to offer the discount.

Quizplus · Accepted Answer

In a typical prisoner's dilemma scenario, both firms offering a discount is the dominant strategy because it leads to a better payoff for each firm regardless of the other firm's decision.

Table 17-25 There Are Just Two Producers of a Certain Product. Each