Each day, there are two strategies available to two bakers, Tim and Horton: sell cakes or sell pastries. They cannot do both in any one day. If both sell cakes, Tim will earn an additional $500 and...

Each day, there are two strategies available to two bakers, Tim and Horton: sell cakes or sell pastries. They cannot do both in any one day.

If both sell cakes, Tim will earn an additional $500 and Horton will lose $500.

If Tim sells cakes and Horton sells pastries, Tim gains $100 and Horton loses $100.

If Horton sells cakes and Tim sells pastries, Tim loses $400 and Horton gains $400.

If both sell pastries, Tim gains $400 and Horton loses $400.

What will be the outcome if both bakers correctly use game theory?

a.None of these outcomes is correct

b.Tim will gain $250, on average, each day

c.Tim will gain $300, on average, each day

d.Tim will gain $100, on average, each day

e.Tim will gain $200, on average, each day

Jun 05, 2022

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