In the following matrix for the profits of two pizza firms with the decision whether or not to offer “free delivery” what is the dominant outcome. Explain why. You deliver You don’t deliver Rival delivers Rival gets $3000 You get $3000 Rival gets $8000 You get $2000 Rival doesn’t deliver Rival gets $2000 You get $8000 Rival gets $6000 You get $6000

Principles of Economics (MindTap Course List)
8th Edition
ISBN:9781305585126
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter17: Oligopoly
Section17.2: The Economics Of Cooperation
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In the following matrix for the profits of two pizza firms with the decision whether or not to offer “free delivery” what is the dominant outcome. Explain why.

 

 

You deliver

You don’t deliver

Rival delivers

Rival gets $3000

You get $3000

Rival gets $8000

You get $2000

 

Rival doesn’t deliver

Rival gets $2000

You get $8000        

Rival gets $6000

You get $6000

 

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