Consider Sadeem and Khloud grocery stores in the city of Dammam. Each store must decide
whether it will remain open on Friday or whether it will close on that day. Monthly payoffs
for each strategy pair are as shown in the table below. The payoffs for the upper part on each
triangle is for Sadeem and the lower part is for Khloud e.g Open on Friday for both (16, 000
is for Sadeem store while 8,000 is for Khloud Store)
a. Which store is the most profitable in this market?
b. Does any of the store (or two of them) has a dominant strategy, which of them?
c. What should this store do? Explain your answer (relate this to Nash Equilibrium and at
the same time determine the strategy that the two stores would engage in at last.
Sample Solution