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Consider a game between Commonwealth Bank (CBA) and ANZ Bank (ANZ) in which the banks can participate. The rules of the game are: If

Consider a “game” between Commonwealth Bank (CBA) and ANZ Bank (ANZ) in which the banks can participate. The rules of the game are: • If both CBA and ANZ keep interest rates low, they will both make a profit of $2.5b. • If both CBA and ANZ keep interest rates high, they will both make a profit of $3.5 billion. • If one bank keeps interest rates low and the other keeps interest rates high, then the bank with the low interest rate will make a profit of $4 billion and the bank with the high interest rate will make a profit of $2 billion. . Using these rules, solve this game for Nash equilibrium (be sure to include your diagram and the logic you followed to solve the game). Is your outcome the best for both CBA and ANZ? Explain

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