If a Cournot Duopolist Announced That It Will Double Its

question 104

Multiple Choice

If a Cournot duopolist announced that it will double its output,the other firm does not view the announcement as credible because

• A) the announcing firm's profits will fall if it carries out the threat.
• B) the other firm's profits will fall if the announcing firm carries out the threat.
• C) the other firm's profits will rise if the announcing firm carries out the threat.
• D) the other firm will double output also.

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Definitions:

Stimulus Generalization

The process by which a response is elicited by stimuli similar to the original stimulus associated with that response.

Higher-Order Conditioning

Higher-order conditioning is a process in classical conditioning by which a conditioned stimulus comes to signal another stimulus that is already associated with an unconditioned stimulus, leading to the same conditioned response.

Shaping

A training approach where steps that increasingly resemble the targeted behavior are rewarded.

Stimulus Discrimination

The ability to distinguish between similar stimuli and respond differently based on past experiences.