The route from New York City to Albany is served by only two airlines, American and Delta. The payoffs from discounting or maintaining high prices are as below.
DELTA'S MAINTAIN DELTA'S DISCOUNT
American's $26,000 $32,000
MAINTAIN $24,000 $18,000
AMERICAN'S $21,000 $16,000
DISCOUNT $28,000 $12,000
Is there a dominant strategy? What is (are) the Nash equilibrium (equilibria)? Explain. Is there a mixed equilibrium strategy? What behavior would you predict for Delta in a one-play game and why