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Oligopoly and Game Theory Practice Test
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Q1
Based on the payoff matrix below (profits in millions of dollars), what is the Nash equilibrium of this game?
Payoffs are listed as $(\text{Firm A},\ \text{Firm B})$.
Firm B: Standardize Product Firm B: Differentiate Product Firm A: Standardize Product (38, 38) (20, 45) Firm A: Differentiate Product (45, 20) (30, 30)
Based on the payoff matrix below (profits in millions of dollars), what is the Nash equilibrium of this game?
Payoffs are listed as $(\text{Firm A},\ \text{Firm B})$.
| Firm B: Standardize Product | Firm B: Differentiate Product | |
|---|---|---|
| Firm A: Standardize Product | (38, 38) | (20, 45) |
| Firm A: Differentiate Product | (45, 20) | (30, 30) |