Question

Answer the question based on the payoff matrix for a duopoly in which the numbers indicate the profit from either opening a coffee shop in a small town or not opening the coffee shop.

a. If the firms are playing a sequential game, then there is first-mover advantage.
b. the firm with the first move will choose not to open a coffee shop.
c. the firm with the first move will choose to open a coffee shop.
d. both firms will choose not to open a coffee shop, regardless of which firm chooses first.

Answer 1

Maybe the answe is b

Answer 2

Option(a) If the firms are playing a sequential game, then there is the first-mover advantage is the correct answer.

The reason that if the firms are playing a sequential game, then there is a first-mover advantage is as follows:

• The payoffs for both players are shown in a payoff table.
• The first number in each cell represents the payoff to the firm.
• And the second number represents the payoff to the firm.
• A payoff matrix is a tool that is used to simplify all of the possible outcomes of a strategic decision.
• A payoff matrix specifies the probable value of different alternatives, depending on different possible outcomes associated with each other.
• Hence, option (a) is the correct answer.

Learn more about the Payoff matrix, refer to:

https://brainly.com/question/12525782

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