1. Two Honolulu burger joints, Hamburger Heaven and Beach Burgers, are trying to

Question

1. Two Honolulu burger joints, Hamburger Heaven and Beach Burgers, are trying to decide whether to charge extra for cheese on their burgers. They must both order their menus today with no knowledge of the other restaurant's decision. The two restraunts do not cooperate. The relevant payoff matrix appears below and both restaurants know all of the information contained therein. Payoff are in terms of weekly profits.

Hamburger Heaven   

Cheese Extra Free Cheese

                Cheese Extra

Beach Burgers

Free Cheese

$1500; $1850

$1200; $1700

$1600; $1550

$1400; $1625

1. The dominant strategy for ____ is _____.   

a. Hamburger Heavan; free cheese.

b. Hamburger Heaven; cheese extra.

c. Beach Burgers; free cheese.

d. Beach Burgers

e. both players; free cheese

                Cheese Extra

Beach Burgers

Free Cheese

$1500; $1850

$1200; $1700

$1600; $1550

$1400; $1625

Explanation / Answer

dominant strategy is that one particular strategy the player chooses against all the strategy of the other economic player irrespective of what the other player chooses,

such strategy for beach burgers is free cheese, and hamburger heaven has no such strategy

so answer is C

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