Table 17-7 Two Companies, Wonka and Gekko, Each Decide Whether to Produce

question 178

Multiple Choice

Table 17-7
Two companies, Wonka and Gekko, each decide whether to produce a good quality product or a poor quality product. In the figure, the dollar amounts are payoffs and they represent annual profits (in millions of dollars) for the two companies.

-Refer to Table 17-7. The more frequently this game is played, the more likely it is that

• A)both firms will produce a good quality product.
• B)both firms will produce a poor quality product.
• C)both firms experience a reduction in profits compared to the Nash equilibrium outcome.
• D)one firm will experience an increase in profits and the other will experience a decrease in profits.

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Definitions:

Obedience To Authority

A form of social influence where individuals comply with the commands or orders of an authority figure.

Homicide

The act of one human being causing the death of another, which can range from accidental to intentional killing.

Assaults

Acts of violence or threats intended to harm or intimidate another person, often punishable under criminal law.

Homicide Rates

The statistical measure of the number of homicides (intentional killings) that occur in a specified population or area within a certain period of time.