The following market is a duopoly populated only by the companies Alpha and Beta. The pay-off matrix immediately below s
Posted: Fri Jul 01, 2022 8:19 am
The following market is a duopoly populated only by thecompanies Alpha and Beta. The pay-off matrix immediately belowshows the combinations of pricing strategies available to the twocompanies. The numbers represent millions of dollars in profit.(The negative sign indicates a loss.) Assuming Alpha and Beta actin their own self-interest, explain what will be the most likelypay-off for these firms in (i) a one-shot game, and (ii) aninfinitely repeated game. Make reference to the concept of Nashequilibrium in your answer.