Question

Mammoths payoffs (profit) are shown in the lower half of each cell in the payoff matrix below.

1. Is this a zero-, negative-, or positive-sum game?

2. What is each airline’s profit if Mammoth discount and Colossal doesn’t?

3. If the airlines cooperate, which strategy is each likely to choose?
   
   
4. In the absence of cooperation, does each player have a dominant strategy? Explain.
   
   
5. What effect would it have on each player’s likely strategy that the game is to be repeated many times?
   
   
   

		Mammoth Airlines
		Discount	Don’t discount
Colossal Airlines	Discount	20 20	111 10
	Don’t discount	10 111	110 110

Answer 1