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# Dominant strategy

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Daaz Hagen and Jerry Ben's are both trying to decide what kind of ice cream machines to purchase. The profits earned by the two firms in each possible outcome are listed
below with Daaz Hagen profits listed first in each cell. Suppose that the two firms are going to make their purchases at the same time.

a. Does either firm have a dominant strategy. Explain.
b. What is the likely outcome. Explain.

Jerry Ben's:

Haagens: Buy ice cream machines \$150, -\$125 \$150, \$300
Buy yogurt machines \$400, \$25 \$50, \$50

(in case format of chart does not convey, see attached)

https://brainmass.com/economics/microeconomics/dominant-strategy-purchases-118348

#### Solution Preview

a. Does either firm have a dominant strategy. Explain.

A strategy is dominant if it gives a player a larger payoff than any other, no matter what any other players do. Hence, Daaz Hagen has no dominant strategy. When JB chooses ice cream machines, HD's profit is higher if they choose ...

#### Solution Summary

Dominant strategy is scrutinized in this case.

\$2.19