Question
Soham and Girish wanted to start their business both are competing to raise money from banks like SBI and HDFC. Soham is in talks to
Soham and Girish wanted to start their business both are competing to raise money from banks like SBI and HDFC. Soham is in talks to raise 40 lakhs and speed up the plans, while Girish plans to secure at least 20 lakhs this year. Since both are going for the same banks, if both approach the SBI, then Girish is guaranteed to get 20 lakhs while Soham will receive 35 lakhs. If both approaches HDFC, then Girish will definitely receive 40 lakhs while Soham will get 35 lakhs. However, if Girish approaches HDFC while Soham pursues SBI, they are guaranteed to get money worth 35 lakhs and 50 lakhs. However, if Girish seeks SBI while Soham is interested in HDFC, they each secure 40 lakhs.
a. Solve for Nash equilibrium/ equilibria for the above scenario as a simultaneous game.
b. Now model the above scenario as a sequential game where Girish makes the first move and find the Nash for this game.
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