Answer to Question #46150 in Economics of Enterprise for baam2014@outlook.com

Question #46150
Consider the following payoff matrix: player B strategy 1 2 1000$ - 2000 player A strategy 1 2000$ -1000 -1000$ 2000 2 -2000 1000 a. Does Player A have a dominant strategy? Explain why or why not. b. Does Player B have a dominant strategy? Explain why or why not
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Expert's answer
2014-09-12T10:40:37-0400
a. Player A has a dominant strategy, he will prefer the strategy 1 to minimize possible losses and maximize possible gains. In our case both Player A and Player B will chose strategy 1, so Player A will get $2000 and Player B will get $1000.
b. Player B has a dominant strategy too, he will prefer the strategy 1 to minimize possible losses. That's why, in our case both Player A and Player B will chose strategy 1, so Player A will get $2000 and Player B will get $1000.

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