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Define game and Nash equilibrium respectively. What are the three components of a game? Consider the following game, Coca- Cola and Pepsi are deciding
Define game and Nash equilibrium respectively. What are the three components of a game? Consider the following game, Coca- Cola and Pepsi are deciding on whether to compete aggressively or restrainedly. 1) If both choose to compete aggressively, the payoffs for Coca-Cola and Pepsi are 100 million and 80 million respectively. 2) If both choose to compete restrainedly, Coca-Cola and Pepsi will receive 120 million and 100 million respectively. 3) If Coca-Cola chooses to compete aggressively while Pepsi chooses to compete restrainedly, Coca-Cola will get 170 million and Pepsi will only get 40 million. 4) If Coca-Cola chooses to compete restainedly but Pepsi chooses to compete aggressively, Coca-Cola will get 80 million and Pepsi will only get 140 million. Identify all-Nash Equilibria for this game.
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