Find the Nash equilibrium strategy and payoff in this simultaneous game. Show your work.

Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter22: Inflation
Section: Chapter Questions
Problem 18RQ: What is deflation?
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Find the Nash equilibrium strategy and payoff in this simultaneous game. Show your work.

Firms can collude (C) or not collude (NC) and their profits in millions are as follows.

Please see attached.

Firm 2
Ads
P1,P2
Ads
No Ads
1,3
10, 2
Firm 1
No Ads 0, 13
4, 6
Transcribed Image Text:Firm 2 Ads P1,P2 Ads No Ads 1,3 10, 2 Firm 1 No Ads 0, 13 4, 6
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