Table 14-1 Godrickporter and Star Connections Are the Only Two Airport Shuttle

question 54

Multiple Choice

Table 14-1

Godrickporter and Star Connections are the only two airport shuttle and limousine rental service companies in the mid-sized town of Godrick Hollow.Each firm must decide on whether to increase its advertising spending to compete for customers.Table 14-1 shows the payoff matrix for this advertising game.
-Refer to Table 14-1.What is the Nash equilibrium in this game?

• A)There is no Nash equilibrium.
• B)Godrickporter increases its advertising budget, but Star Connections does not.
• C)Star Connections increases its advertising budget, but Godrickporter does not.
• D)Both Godrickporter and Star Connections increase their advertising budgets.

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Definitions:

Presumption

An assumption that is taken for granted, often without conclusive evidence.

Jean-Jacques Rousseau

A Genevan philosopher, writer, and composer of the 18th century, known for his influential thoughts on education and social contract theory.

Thomas Hobbes

An English philosopher known for his work in political philosophy, notably "Leviathan," advocating for the social contract theory.

John Rawls

A 20th-century American political philosopher who is known for his theory of justice as fairness, which attempts to reconcile egalitarian and liberal principles, detailed in his works such as "A Theory of Justice."