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Consider a street with 5 evenly spaced residential regions (regions 1-5 as shown in Chapter 8). Each region has 100 residents. Two food trucks decide
Consider a street with 5 evenly spaced residential regions (regions 1-5 as shown in Chapter 8). Each region has 100 residents. Two food trucks decide where to locate sequentially. First, food truck A chooses a location. Food truck B observes the location choice of food truck A, then chooses where to locate. S; = (1,2,3,4,5), for i E {A, B}. Each resident goes to whichever stand is closer to buy food. Each food truck makes $1 in profit per customer. The trucks can locate in the same region. Half the customers go to each stand when the distance is the same. Find the subgame perfect Nash equilibrium of this game. Where will the two food trucks locate in equilibrium
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