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If you advertise and your rival advertises, you each will earn $3 million in prots. If neither of you advertises, you will each earn $7
If you advertise and your rival advertises, you each will earn $3 million in prots. If neither of you advertises, you will each earn $7 million in profits. However, if one of you advertises and the other does not, the rm that advertises will earn $10 million and the non-advertising firm will earn $1 million. If you and your rival plan to hand your business down to your children, and this "bequest" goes on forever, then a Nash equilibrium when the interest rate is zero is for Multiple Choice O each rm to not advertise until the rival does and then to advertise forever provided the interest rate is sufciently low. each rm to advertise until the rival does not advertise and then not advertise forever. 0 your firm to always advertise when your rival does, provided that the interest rate is sufciently large. 0 your firm to never advertise
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