Question related to game theory
Managerial Economics
Corporation X declares that if it decrease its price subsequent to a buy, the early customer will get a rebate so that he or she will pay no more than those purchasing after the price reduction.
A. If Company X has only one rival, and if its rival too makes such an announcement, does this change the payoff matrix? If so, in what way?
B. Do such announcements tend to discourage price cutting? Why or why not?
