188 -Consider the Pricing Game Depicted in Figure 13.6. Payoffs Are

Multiple Choice

188
-Consider the pricing game depicted in Figure 13.6. Payoffs are in millions of dollars. Suppose that if firm A charges a high price there is a 15 percent chance that firm B will charge a high price and an 85 percent chance that firm B will charge a low price. Suppose that if firm A charges a low price there is an 85 percent chance that firm B will charge a high price and a 15 percent chance that firm B will charge a low price. If firm A is risk neutral, what is the subgame perfect equilibrium for this game?

A) {High price 6 High price}
B) {High price 6 Low price}
C) {Low price 6 High price}
D) {Low price 6 Low price}