Microeconomics
Microeconomics
11th Edition
ISBN: 9781260507140
Author: David C. Colander
Publisher: McGraw Hill Education
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Chapter 20, Problem 5QE

(a)

To determine

Explain the dominant strategy of each firm.

(b)

To determine

Find the Nash equilibrium.

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What is the difference, if any, between a dominant strategy and a Nash equilibrium?  Give examples.
Use the following normal-form game to answer the following questions. a. For what values of x is strategy D (strictly) dominant for player 2? b. For what values of x is strategy B (strictly) dominant for player 1? c. For what values of x is (B, D) the only Nash equilibrium of the game?
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