Table 17-6 Two Home-Improvement Stores (Lopes and HomeMax) in a Growing Urban

question 173

Multiple Choice

Table 17-6
Two home-improvement stores (Lopes and HomeMax) in a growing urban area are interested in expanding their market share. Both are interested in expanding the size of their store and parking lot to accommodate potential growth in their customer base. The following game depicts the strategic outcomes that result from the game. Increases in annual profits (in millions of dollars) of the two home-improvement stores are shown in the following figure.
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-Refer to Table 17-6. When this game reaches a Nash equilibrium, annual profit will grow by

• A)$1.5 million for HomeMax and by $1.0 million for Lopes.
• B)$3.4 million for HomeMax and by $0.4 million for Lopes.
• C)$0.6 million for HomeMax and by $3.2 million for Lopes.
• D)$2.5 million for HomeMax and by $2.0 million for Lopes.

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Definitions:

Color Line

A term originally used to describe the racial segregation in the United States, particularly in reference to African Americans and whites.

Color Line

The term "color line" was coined by W.E.B. Du Bois to refer to the racial segregation and discrimination that divides people into white and non-white groups.

Iterative Agency

The concept that agents (individuals or groups) make decisions and take actions repeatedly, with each iteration having the potential to change the context or conditions under which future decisions and actions are made.

Field Agency

The capacity or power of individuals or groups to act independently and make their own free choices within a social field.