1. 4. It is possible for two-player games to be quite asymmetric: Each player might have a different set of options, and the payoffs may be quite different. Consider the following example between a large firm and a small firm (the first number in each box denotes the large firm’s payoff, the second number shows the small firm’s payoff):

Small Firm (player 2)

Expand Operation High Price Large Firm

(player 1)

Medium Price Low Price 50, 20 60, 20 40, 0

a. Does either firm have a dominant strategy?

b. Find all Nash equilibria.

Stay Small 60, 10 70, 10 90, 10