Question
Given the following action and payoff table, which answer is correct? Firm B Firm B Undervalue Fair value Firm A Undervalue 16, 16 20, 15
Given the following action and payoff table, which answer is correct?
| Firm B | Firm B | ||
| Undervalue | Fair value | ||
| Firm A | Undervalue | 16, 16 | 20, 15 |
| Firm A | Fair value | 15, 20 | 18,18 |
Nash Equilibrium exists: Undervalue, Undervalue
Nash Equilibrium exists: A - Undervalue, B - Fair value
Nash Equilibrium exists: A - Fair value, B - Undervalue
Nash Equilibrium exists: A - Fair value, B - Fair value
Nash Equilibrium doesn't exist.
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Personal Finance Version 3.1
Authors: Rachel S. Siegel
3rd Edition
1453334807, 978-1453334805
