Consider the payoff matrix at right Firm B OA. The pair of strategies L-L is the...

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Question

Answer 1

Answer #1

1) in the payoff matrix it can easily be seen that the pair of strategies is H-H and L-L are the only Nash Equilibria.

Hence, option B is correct.

2) according to the payoff matrix for the contest, each Firm bids $45 million and earns a profit of $15 million.

Hence, option B is correct.

Answer 2

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