3. Find the Nash equilibria of the following normal form game (Gibbons, 1992, pgs. 9-10). Player 2 Save Use Delay Save 5,5 -2,10 0,0 Player 1 Use 3,2 1,-1 0,0 Delay 0,0 0,0 0,0

Sometimes oligopolies in the same industry are very different in size. Suppose we have a duopoly where one firm (Film A) is large and the other film (Film B) is small, as the prisoners dilemma box in Table 10.4 shows. Assuming that both films know the payoffs, what is the likely outcome in this case?