Unit VI Assignment ECO 6301, Economics for Managers

This document is a two-part Unit VI Assignment for the course ECO 6301, Economics for Managers, focusing on the application of Game Theory, specifically identifying Nash Equilibrium and Dominant Strategies in competitive pricing scenarios between two firms.Part 1: Game Analysis (Payoffs: [8,8], [0,10], [10,0], [3,3])The first game models a scenario where both Firm 1 and Firm 2 can choose a "High Price" or a "Low Price."FindingResultJustificationDominant Strategy for Firm 1Yes, "Low Price"1.Firm 1's payoff for "Low Price" is higher than "High Price" regardless of Firm 2's choice (10 > 8 and 3 > 0)2222.Dominant Strategy for Firm 2Yes, "Low Price"3.Firm 2's payoff for "Low Price" is higher than "High Price" regardless of Firm 1's choice (10 > 8 and 3 > 0)4444.Nash Equilibrium(Low Price, Low Price) with payoffs [3, 3]5.Since both firms have a dominant strategy to choose "low," they will both choose this option, resulting in the equilibrium6.