In the following matrix for the profits of two dry cleaners with the decision whether or not to offer discounts for regular customers.  What do expect to happen? Why? Note: they cannot collude     You don't offer discount You offer discount Rival doesn't offer discount Rival gets $2000 You get  $2000 Rival gets $1000 You get $6000   Rival offers discount Rival gets $6000 You get $1000         Rival gets $5000 You get $5000

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
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Chapter1: Making Economics Decisions
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2. In the following matrix for the profits of two dry cleaners with the decision whether or not to offer discounts for regular customers.  What do expect to happen? Why? Note: they cannot collude

 

 

You don't offer discount

You offer discount

Rival doesn't offer discount

Rival gets $2000

You get  $2000

Rival gets $1000

You get $6000

 

Rival offers discount

Rival gets $6000

You get $1000        

Rival gets $5000

You get $5000

 

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