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Two competing coffee shops, 'Bean Haven' and 'Daily Grind', are the only sellers in a small town. Each must decide whether to set a high price or a low price for their coffee. The daily profits for each shop depend on the combination of prices they choose, as shown in the table below (profits are listed as [Bean Haven, Daily Grind]):
| Daily Grind: High Price | Daily Grind: Low Price | |
|---|---|---|
| Bean Haven: High Price | [$1000, $1000] | [$400, $1200] |
| Bean Haven: Low Price | [$1200, $400] | [$700, $700] |
Given this information, which outcome represents a stable state where neither shop has an incentive to change its pricing strategy on its own?
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Two competing coffee shops, 'Bean Haven' and 'Daily Grind', are the only sellers in a small town. Each must decide whether to set a high price or a low price for their coffee. The daily profits for each shop depend on the combination of prices they choose, as shown in the table below (profits are listed as [Bean Haven, Daily Grind]):
Daily Grind: High Price Daily Grind: Low Price Bean Haven: High Price [$1000, $1000] [$400, $1200] Bean Haven: Low Price [$1200, $400] [$700, $700] Given this information, which outcome represents a stable state where neither shop has an incentive to change its pricing strategy on its own?
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