(Table) HH Gregg and Best Buy Are Competing for Sales

question 41

Multiple Choice

(Table) HH Gregg and Best Buy are competing for sales for their newest high-capacity mobile device battery packs. Each firm has a pricing strategy of either a high price or a low price. Profits for each store are listed in the payoff boxes, with Best Buy's payoff listed first. Based on the table, why is the game characterized as a prisoner's dilemma game?
$\begin{array}{c}\quad \quad \quad \quad \quad \quad \quad \quad \text { HH Gregg }\\\begin{array}{ccc} \text { Best Buy }\\&& \text { High } & \text { Low } \\&\text { High } & 100,100 & 30,120 \\&\text { Low } & 120,30 & 50,50\end{array}\end{array}$

• A) Given dominant strategies, only Best Buy is able to achieve a high-profit outcome.
• B) HH Gregg is forced into keeping prices high; hence, it is held "prisoner."
• C) There exists a mutually better outcome for both players as long as one player deviates from the Nash equilibrium.
• D) There exists a mutually better outcome for both players; however, it is not rational to play the strategies that result in this outcome (which requires collusion) in a one-time game.

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Definitions:

Technological Advance

The progress and innovation in technology, leading to the development of new devices, systems, or methods that improve efficiency, capability, and performance.

Appeal

A process by which a case is brought before a higher court for review of the decision of a lower court, aiming to overturn or modify the lower court's judgment.

Universal Negro Improvement Association

An organization founded by Marcus Garvey in 1914, aimed at promoting African cultures and economic independence among African people globally.

White Imperialists

Refers to individuals or leaders from predominantly white nations who support or engage in imperialism, the policy of extending a country's power and influence through colonization or military force.