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## Dr. Fine and Dr. Feelgood are the only two medical doctors o

Paper help Economics Dr. Fine and Dr. Feelgood are the only two medical doctors o

# Dr. Fine and Dr. Feelgood are the only two medical doctors o

Dr. Fine and Dr. Feelgood are the only two medical doctors offering immediate walk-in medical serv… Show more Dr. Fine and Dr. Feelgood are the only two medical doctors offering immediate walk-in medical services in the town of Springfield. That is, they operate in a duopoly. Each doctor can charge either a high price or a low price for a standard medical visit. The accompanying matrix shows their payoffs, in profits per patient (in dollars), for any choice that the two doctors can make. 1. Now suppose the two doctors play this game twice. Also, suppose each doctor can play one of two strategies: it can play either â€œalways charge the low priceâ€ or â€œtit for tatâ€â€” that is, it starts off charging the high price in the first period, and then in the second period it does whatever the other doctor did in the previous period. Write down the payoffs to Dr. Fine from the following four possibilities: a. Dr. Fine plays â€œalways charge the low priceâ€ when Dr. Feelgood also plays â€œalways charge the low price.â€ FIRST Period Payoffs SECOND Period Payoffs TOTAL Payoffs Charges (high or low) Charges (high or low) Fine Fine Feelgood Feelgood b. Dr. Fine plays â€œalways charge the low priceâ€ when Dr. Feelgood plays â€œtit for tat.â€ FIRST Period Payoffs SECOND Period Payoffs TOTAL Payoffs Charges (high or low) Charges (high or low) Fine Fine Feelgood Feelgood c. Dr. Fine plays â€œtit for tatâ€ when Dr. Feelgood plays â€œalways charge the low price.â€ FIRST Period Payoffs SECOND Period Payoffs TOTAL Payoffs Charges (high or low) Charges (high or low) Fine Fine Feelgood Feelgood d. Dr. Fine plays â€œtit for tatâ€ when Dr. Feelgood also plays â€œtit for tat.â€ FIRST Period Payoffs SECOND Period Payoffs TOTAL Payoffs Charges (high or low) Charges (high or low) Fine Fine Feelgood Feelgood • Show less

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