Question
There are two businesses (businesses 1 and 2), and each business can choose district A or district B for their new store. Business 1 makes
There are two businesses (businesses 1 and 2), and each business can choose district A or district B for their new store. Business 1 makes more money if both businesses open in the same neighborhood. For company 2, it is the opposite. It is more profitable for company 2 if the two stores open in different districts. The game is only played once and they make their decision simultaneously. Assume the following payoff matrix:
Company 2 A B
Company 1 Y (4.-4) (-6.6) B (-2.2) (4.-4)
earnings: (Company 1 and Company 2),
1) Calculate the Nash equilibrium with mixed strategy
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