1. Strategic Competition Over Time:Two companies compete in the following strategic interaction in which they can choose one out of two possible prices that we call low and high. The payout matrix stating payouts for any possible prices chosen by the two companies is given below. In each cell, the number on the left indicates the payout to company B, and the number on the right indicates the payout to company A.

2 3 1 P1+- P2 + Pa +( Pat . . .Firm A Low High Firm B Low 200,200 400 ,180 High 180,400 320,320