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In the Castorian Airline market there are only two firms. Each firm is deciding whether to offer a frequent flyer program. The annual profits (in millions of dollars) associated with each strategy are summarized in the following table (where the first number is the payoff to Airline A and the second to Airline B): a) Does either player have a dominant strategy? describe. b) Is there a Nash equilibrium in this game? If so what is it? c) Is this game an ex of the prisoners' dilemma? describe.

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M965270

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