Discussion Questions Essay Example | Topics and Well Written Essays - 250 words

Discussion Questions - Essay Example While considering the facts given in situation (a), we came to know that both the firms (our firm as well as competitor’s firm) have revealed their strategies openly and both the firms can calculate their own benefits while taking other’s production quantity and other strategies into account. This situation offers the optimal benefits that are driven by the strategies applied by our competitor therefore it indicates that there is a Nash Equilibrium condition (James Brickley,  Clifford Smith,  Jerold Zimmerman 9-5). While on other hand when we don’t know exactly the strategies of our competitor and still set our preference for optimal benefits then the condition refers to dominant strategies. Dominant strategies always lead to maximum profit whether we know our competitor’s strategies or not. This particular condition may be a case of dominant strategies because here we are dedicated for optimal profits (James Brickley,  Clifford Smith,  Jerold Zimmerman 9-5). However, since some dominant strategies fall under Nash Equilibrium and the situation satisfies the required aspects of Nash Equilibrium we can say that this is a Nash Equilibria