Multiple Choice

Consider the following payoff matrix for two competing coffee shops, 'The Daily Grind' and 'Espresso-Yourself', which are deciding whether to launch a 'New Loyalty Program' or maintain their 'Current System'. The payoffs represent weekly profits in hundreds of dollars. The first number in each pair is The Daily Grind's profit, and the second is Espresso-Yourself's profit.

 Espresso-Yourself
 New Loyalty ProgramCurrent System
The Daily GrindNew Loyalty Program(20, 15)(30, 12)
Current System(10, 25)(18, 18)

If 'The Daily Grind' decides to launch the 'New Loyalty Program', what is the best response for 'Espresso-Yourself' to maximize its own profit?

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Updated 2025-08-09

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