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5. Consider the following example of a strategic interaction between two restaurants in a small economy dominated by tourism.The two restaurants can either target the
5. Consider the following example of a strategic interaction between two restaurants in a small economy dominated by tourism.The two restaurants can either target the tourist population or the local population. Restaurant B Tourists Locals Tourists 2 , 2 5 i 4 Restaurant A Locals 4 , 6 1 , 1 a} Solve for the Nash Equilibriumis). b] Characterize this game what of the common games that we discussed in class does this example most closely resemble? Given this understanding, what can Restaura ntA do to make sure that they achieve the most desirable result possible? Explain. c] Suppose that Restaurant A attempts to use a threat to achieve the outcome that they want. What must they do to make that threat credible, and what are some potential strategies for doing so
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