Practical Detailed Example of Use of Game Theory in Detail using Nash Equilibrium along with Conclusion for Swiggy/ Zomato

Practical Detailed Example of Use of NPV in Detail along with Conclusion for Swiggy/ Zomato. What will happen if NPV is negative

Payoff Matrix (representing profits in millions): Swiggy Lowers Prices Swiggy Maintains Prices 2 Zomato Lowers Prices - 2 HO Zomato Maintains Prices Nash Equilibrium: The Nash Equilibrium is a situation where no player has an incentive to change their strategy given the strategy of the other player. In this example, the Nash Equilibrium could be where both Swiggy and Zomato choose to maintain their prices (bottom right cell). Conclusion: In a Nash Equilibrium, both Swiggy and Zomato have found a strategy where neither has an incentive to unilaterally deviate from their chosen strategy. This equilibrium could represent a stable pricing scenario, ensuring both companies maintain a certain level of profitability without engaging in a price war that could be detrimental to both. However, real-world scenarios are more complex, and various factors can influence the equilibrium, such as changes in consumer preferences, external market forces, or new entrants. It's crucial for companies like Swiggy and Zomato to continually analyze the market dynamics and adjust their strategies accordingly