A and B are competitors in the mobile phone industry. Both A and B have to decide whether to participate or not to participate in a Phone for the Future Trade Fair next month. The matrix payoff below shows the profits (USD million) corresponding to their actions. a) What is the Nash equilibrium of the above game? b) Is the Nash equilibrium Pareto Optima? Explain. c) Suppose B is pessimistic of A's rationality, what is B's strategy? Compare and comment on B's strategy in (a) and (c). A Participate Do not participate B Participate Do not participate 400,1000 200,200 500,500 1000,400

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