This Question Refers to the Payoff Matrix Below Where Profits $\text { United }$

question 29

Essay

This question refers to the payoff matrix below where profits for United Airlines and American airlines are shown for alternative pricing strategies. The airlines can either hold prices where they are or engage in price cutting activity.


                                  $\text { United }$
$\begin{array}{l}\begin{array} { l } \\\text {American} & \text { hold rates}\\\\ & \text { cut rates}\end{array}\begin{array} { l } \hline \text { hold rates } & \text { cut rates } \\\hline \mathrm{U}=100 & \mathrm{U}=160 \\\mathrm{~A}=100 & \mathrm{~A}=60 \\\hline \mathrm{U}=80 & \mathrm{U}=70 \\\mathrm{~A}=150 & \mathrm{~A}=70\end{array}\end{array}$
Does either airline have a dominant strategy? If so, what is it?

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Definitions:

Cognitive Dissonance

The psychological conflict resulting from holding two or more contradictory beliefs, values, or attitudes simultaneously.

Sociolinguistics

The study of how language is influenced by social factors, including cultural norms, expectations, context, and the identity of speakers and listeners.

Social Psychology

A branch of psychology focused on understanding how individuals' thoughts, feelings, and behaviors are influenced by the actual, imagined, or implied presence of others.

Discipline

A field of study or branch of knowledge, or the practice of training individuals to obey rules and codes of behavior.