Sears and Wal-Mart must decide whether to lower their prices, based on the poten

Question

Sears and Wal-Mart must decide whether to lower their prices, based on the potential economic profits shown in the table above. (An "S" indicates Sears' profit and a "W" indicates Wal-mart's profit.) Who has a dominant strategy? Walmart has a dominant strategy but Sears does not. Sears has a dominant strategy but Walmart does not. Both Walmart and Sears have dominant strategies. Neither Walmart nor Sears has a dominant strategy More information is needed to determine if either Sears or Walmart has a dominant strategy.

Explanation / Answer

Given that Sears sets low prices Walmart wants to set high prices. Given that Sears sets high prices Walmart wants to set low prices. Thus, there is no dominant strategy for Walmart. Given that Walmart sets low prices Sears wants to set low prices. Given that Walmart sets high prices Sears wants to set high prices. Thus, there is no dominant strategy for Sears. So the answer is D neither Walmart nor Sears has a dominant strategy.

Related Questions

Navigate

• Browse (All)
• Browse S
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.