An oligopoly using a maximin strategy must believe that the losses from underestimating a competitor's skill are worse than those from overestimating it.

Question

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In a maximin strategy, a firm minimizes the maximum potential loss by assuming that its competitors are as skilled as possible. Therefore, underestimating a competitor's skill could lead to a large loss, which is considered worse than overestimating it.

An Oligopoly Using a Maximin Strategy Must Believe That the Losses