Question

Suppose that walmart and target are selling sony flat-screen computer monitors for a price of $150 or $200 each. based on the information in the payoff matrix, what is the dominant strategy?

Answer 1

The dominant strategy refers to the strategy that is best for a company regardless of the strategies that other firms are using. For the scenario given in the payoff matrix, THE DOMINANT STRATEGY IS FOR BOTH COMPANIES TO SELL AT THE RATE OF $150. At this price, each company will make the highest profits.