The Figure Shown Displays the Choices That Could Be Made

question 60

Multiple Choice

The figure shown displays the choices that could be made by two coffee shops: Starbucks and Dunkin' Donuts. Both companies are trying to decide whether or not to expand into a new area. The area can only handle one coffee shop's expansion, and the expansion of one shop will cause the other to lose some business. If both coffee shops expand, the market will become saturated and neither will do well. The payoffs for these shops are the additional profits (or losses) they will earn.If Dunkin' Donuts is able to use a commitment device that commits them to expansion, then Starbucks should:

• A)also expand.
• B)not expand.
• C)attempt to cooperate.
• D)convince Dunkin' Donuts not to expand.

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Definitions:

Internal Validity

The degree to which the results of a study can be attributed to the experimental treatments or interventions rather than other factors.

Spurious Relationship

An apparent relationship between two variables that is actually caused by a third variable.

Variables

Elements, features, or factors that are likely to vary or change within the context of a scientific study or experiment.

Manipulation Checks

Procedures used in experimental research to determine whether the experimental manipulations have the intended effect on the study subjects.