09:144.Consider the game matrix below. Acompany is thinking about establishing itself in amarket. Another company is already in this marketand can choose to start a price war or not.Company 1 can thus choose "Establish" or "Do notestablish"; company 2 "Price war" or "Nothing pricewar". The numbers in the cells are profits (inthousands of SEK). In each cell, company 1's profitis listed first: (100,60) thus means that company 1receives one hundred thousand SEK in profit andthat company 2 receives sixty thousand SEK inprofit. Both firms are profit maximizing.4aFöretag 2PriskrigIngetpriskrigEtablera(100, 60)(120, 25)Företag 1Etablera ejstrategy. Motivate based on the gains ithe game matrix.4b(170, 50)85(80, 90)Analyze whether company 1 has a dominantAnalyze whether company 2 has adominant strategy. Motivate based on the gains ithe game matrix.4cDetermine all Nash equilibria of the game.Justify based on the winnings in the game matrix

player-2 player-1 strategy-1 strategy-2 strategy-1 100,60 170,50 strategy-2 120,25 80,90…

Answered: Priskrig get -iskrig (100, 60) (120,…

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Economics

Priskrig get -iskrig (100, 60) (120, 25) (170, 50) (80, 90)

Principles of Microeconomics (MindTap Course List)

8th Edition

ISBN:9781305971493

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter17: Oligopoly

Section: Chapter Questions

Problem 9PA

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