This Figure Displays the Choices Being Made by Two Coffee

question 54

Multiple Choice

This figure displays the choices being made by two coffee shops: Starbucks and Dunkin Donuts.Both companies are trying to decide whether or not to expand in an area.The area can handle only one of them expanding,and whoever expands will cause the other to lose some business.If they both expand,the market will be saturated,and neither company will do well.The payoffs are the additional profits (or losses) they will earn.
If Starbucks and Dunkin Donuts are faced with the game in the figure shown,we can see that:

• A) Starbucks has a dominant strategy, but Dunkin Donuts does not.
• B) Dunkin Donuts has a dominant strategy, but Starbucks does not.
• C) neither company has a dominant strategy.
• D) both companies have a dominant strategy.

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Definitions:

Bandura

Bandura refers to Albert Bandura, a psychologist best known for his work on social learning theory and the concept of self-efficacy.

Ellis

Refers to Albert Ellis, an American psychologist who developed Rational Emotive Behavior Therapy (REBT), a precursor to cognitive behavioral therapy.

Aversive Conditioning

A psychological process of learning involving the use of unpleasant stimuli to stop or change unwanted behaviors.

Unpleasant Consequences

Negative outcomes or penalties that follow undesired actions or behaviors, often used as deterrents.