IFacebook is much larger than Twitter and earns more money with each decision. FacebookITwitter Twitter Raise Price Twitter Lower Price What should Facebook do if Twitter raises their price? What should they do if they lower their price? What is the Nash equilibrium? Why is this an example of the prisoner's dilemma ? More difcult one: In the below scenario the Workers union is in negotiations with the Owners. They have to decide what their strategy is in negotiations. Tough means go on strike and Easy means give in to the other side's demands. What should the Owners do if the workers are being tough? What should the Owners do if they are being easy? What is the Nash equilibrium/s? (Stretch question) Why does this encourage Apple/other firms to be the first one to market with a product or price? Even more difficult one: Ansel vs Ben Ben Raise Ben Check Raise 40/26 70/45 Check 38/30 10/10 What should Ansel do if Ben raises? What should he do if Ben Checks? What is his Nash? What should Ben do if Ansel Raises? Checks? What is his Nash? Who has the better hand