Here is a problem that I got on a test and two AP Economicsteachers are disagree
ID: 1240755 • Letter: H
Question
Here is a problem that I got on a test and two AP Economicsteachers are disagreeing about. Whoever answers this, please stateyour level of expertise in Economics (high school student, collegestudent, teacher, professor, etc.) as well:"Two companies, Bright and Sparkle, have a choice between twodifferent strategies. The payoff matrix below shows the payoff fromeach:
Sparkle Strat 1
Sparkle Strat 2
Bright Strat 1
B: $3,000 S: $6,000
B: $2,000 S: $4,000
Bright Strat 2
B: $500 S: $3,000
B: $2,500 S: $0
What is the dominant strategy for each company, if there isany?"
Sparkle Strat 1
Sparkle Strat 2
Bright Strat 1
B: $3,000 S: $6,000
B: $2,000 S: $4,000
Bright Strat 2
B: $500 S: $3,000
B: $2,500 S: $0
Explanation / Answer
A dominant strategy is the plan of action that will be better than the other regardless of what the other player's plan of action is. The dominant strategy for Sparkle would be strategy one. By picking strategy one Sparkle will be better off no matter what strategy Bright picks. $6,000 > $4,000 and $3,000 > $0. There is no dominant strategy for Bright as different strategies are better in different situations. If Sparkle picks strategy 1 Bright is better off picking strategy 1 while if Sparkle picks strategy 2 Bright is better off picking strategy 2. I am a college student who took economics
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