Dominant Strategy - Airline Example

Profits are shown for united airline and american airline, the airline can either hold prices where they are or cut prices. does either airline have a dominant strategy? Explain in detail: see attachment

© SolutionLibrary Inc. 9836dcf9d7

Solution Preview

...strategy because if American chooses stable prices, it is better for United to choose to lower prices (U=160) then to choose stable prices (U=100). If American chooses to lower prices it is better for United to keep stables prices (U=80) then to lower prices (U=70). Therefore, ...