Reference no: EM13177497
Game Theory Suppose there are only two car companies, Ford & Chevrolet. Ford believes that Chevrolet will match any price it sets, but Chevrolet too is interested in maximizing profit. Use the following price and profit data to answer the following questions.
a. What will Ford charge
b. What price will Chevrolet charge once Ford has set its price?
Ford's selling
price in $ Chevrolet's selling
price in $ Ford's profits
in $ (millions) Chevrolet's profits in $ (millions)
4,000 4,000 8 8
4,000 8,000 12 6
4,000 12,000 14 2
8,000 4,000 6 12
8,000 8,000 10 10
8,000 12,000 12 6
12,000 4,000 2 14
12,000 8,000 6 12
12,000 12,000 7 7
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