Consider the following simultaneous move game. Two firms are considering where to open their flagship store in a state they are expanding into. After they simultaneously make their decisions, they compete and earn the additional profits (in millions) given in the cell corresponding to the location they both chose. Which Cell is the Nash Equilibrium? (underlined payoffs are for Firm 1) Firm 2 Locations Location Location Location 1 2 Location 10, 4 5, 3 3, 2 A B Firm 1 0, 1 4, 6 6,0 Location Locations F y D E Location 2, 1 3, 5 2,8 G H

Consider the following simultaneous move game. Two firms are considering where to open their flagship store in a state they are expanding into. After they simultaneously make their decisions, they compete and earn the additional profits (in millions) given in the cell corresponding to the location they both chose. Which Cell is the Nash Equilibrium? (underlined payoffs are for Firm 1) Firm 2 Locations Location Location Location 1 2 Location 10, 4 5, 3 3, 2 A B Firm 1 0, 1 4, 6 6,0 Location Locations F y D E Location 2, 1 3, 5 2,8 G H

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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