Question
Pa off Matrix 2 Firm 2 Invest in Green Technolo Invest in Green 8400. 8400 Firm 1 Do not invest in sooo: 6000 Green
Pa off Matrix 2 Firm 2 Invest in Green Technolo Invest in Green 8400. 8400 Firm 1 Do not invest in sooo: 6000 Green Technolo Do not invest in Green Technol 6000: sooo 7200: 7200 c) Find the Nash Equilibrium or Nash Equilibria ofthis new game in Payoff Matrix 2. (2 marks) d) Explain what problem this new game will give rise to: and why it is still possible for Firm 1 to not invest in Green Technology _ (4 marks) e) Show how the situation in Payoff Matrix 2 could change ifthis game were plaved sequentially: with Firm 1 as the first mover: using an appropriate and find the subgame perfect equilibrium. (6 marks)
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