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    game theory in marketing


    In the limit pricing payoff matrix, Coa can choose a given row of outcomes by offering a limit price(up) or monopoly price (down). Han can choose a given column of outcomes by choosing to offer a limit price (left) or monopoly price (right). Neither firm can choose which cell of the payoff matrix to obtain; the payoff for each firm depends upon the pricing strategioes of both firms.


    Coa Pricing Strategy Limit Price Monopoly Price
    Limit Price $1.5 billion,$3billion $2.5 billion,$2 billion
    Monopoly Price $1 billion,$4 billion $1.75 billion,$3 billion

    Is there a dominant strategy equilibrium in this problem? If so, what is it?

    Is there a Nash equilibrium in this problem? If so, what is it?

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    Solution Summary

    The solution examines game theory in marketing. The limit pricing payoff matrix is determined. Whether there is a Nash equilibrium in the problem is determined.