2. Consider the following game. Assume that this game is played simultaneously and without collusion.  The two companies are choosing between two strategies: go international or stay national. The outcomes of each strategy for each company are given the following payoff matrix:   a) Find Nash equilibrium in this game. Interpret the equilibrium you found.  b) What is the Chipco's dominant strategy, if it has one? How shall Chipco's payoffs change for it to not have a dominant strategy anymore?

Microeconomics: Private and Public Choice (MindTap Course List)
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Chapter11: Price-searcher Markets With High Entry Barriers
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2. Consider the following game. Assume that this game is played simultaneously and without collusion.  The two companies are choosing between two strategies: go international or stay national. The outcomes of each strategy for each company are given the following payoff matrix:

 

a) Find Nash equilibrium in this game. Interpret the equilibrium you found. 

b) What is the Chipco's dominant strategy, if it has one? How shall Chipco's payoffs change for it to not have a dominant strategy anymore? 

Dramco's strategies
International
National
$11
$5
A
B
$11
$20
$20
$17
D
$5
$17
Chipco's strategies
National
International
Transcribed Image Text:Dramco's strategies International National $11 $5 A B $11 $20 $20 $17 D $5 $17 Chipco's strategies National International
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