Game theory suggests that competing firms in an oligopolistic industry may be

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01-04-2022
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Game theory suggests that competing firms in an oligopolistic industry may be

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ewomazinoade ewomazinoade · Answer 1 · 2022-04-13T10:21:33+02:00

Game theory suggests that competing firms in an oligopolistic industry may be reluctant to change prices because they anticipate that rivals will match price cuts but ignore price increases.

What is Game theory?

Game theory looks at the interactions between participants in a competitive game and calculates the best choice for the player.

Dominant strategy is the best option for a player regardless of what the other player is playing. Nash equilibrium is the best outcome for players where no player has an incentive to change their decisions.

Here are the options:

. too quick to raise prices because they will fail to anticipate that rivals may gain market shares.

b. reluctant to change prices because they anticipate that rivals will match price cuts but ignore price increases

c. reluctant to change prices because they anticipate that rivals will ignore price cuts but match price increases

d. too quick to cut prices because they fail to anticipate that rivals may also cut their prices.

To learn more about game theory, please check: https://brainly.com/question/25746243

kanikabajaj294 kanikabajaj294 · Answer 2 · 2022-05-04T14:53:48+02:00

Game theory suggests that competing firms in an oligopolistic industry may be reluctant to price changes.

What do you mean by oligopoly?

An oligopoly is a form of market that is made up of a few large firms engaging in strategic behavior. An automobile is the best example of an oligopoly market.

A game theory suggests that competing firms in an oligopoly industry may be reluctant in changes the price because they can analyze that rivals can match the price cuts but generally ignore the increase in the prices.

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