Reference no: EM133401496

Case Study: Moonpath University and Nomash University are each other's main competitor in the city of Oligo Jaya.

Suppose that each university can either raise the tuition fees, or maintain their current fees. If both universities raise their tuition fees, they would each earn medium profits. If one university maintains its current tuition fees, it will earn low profits if the other university also maintains its current fees, whereas it will earn high profits if the other university raises its fees. On the other hand, if one university raises its tuition fees while the other university does not, the university that raised its fees will earn very low profits.

Questions: Based on the given scenario, answer the following questions:

Sketch a 2 x 2 pay-off matrix (like the one that you were shown in class) to illustrate the game described above. Make sure that you label the diagram completely.???????Does either university have a dominant strategy? Explain why.

What is the Nash equilibrium in this game? Explain why.

Is there an outcome that is superior to the Nash equilibrium for both universities?

What would each university have to do to achieve it?

Who would lose if this outcome were achieved?

Do you think this outcome will be achieved? Explain clearly.