Two similar firms compete against each other by choosing their advertising budgets. Each can choose either a high or a low budget. The profits (in thousands of dollars) for each possible combination of high and low budgets are shown in the payoff matrix below. Firm A's profits are on the left side of each cell, and Firm B's profits are on the right. Firm B High Low High 100, 100 150, - 50 Firm A Low - 50, 150 200, 200 Suppose both firms are run by cautious managers who use maximin strategies when making decisions like this one. If both managers choose their maximin strategies, what will be the outcome of this game? profit given the other firm's choice of advertising budget. Find the Nash Firm A chooses the high advertising budget and Firm B chooses the low budget Both firms choose high advertising budgets Both firms choose low advertising budgets tcome of this game? Firm A chooses the low advertising budget and Firm B chooses the high budgetTwo similar firms compete against each other by choosing their advertising budgets. Each can choose either a high or a low budget. The profits (in thousands of dollars) for each possible combination of high and low budgets are shown in the payoff matrix below. Firm A's profits are on the left side of each cell, and Firm B's profits are on the right. Firm B High Low High 100, 100 150, - 50 Firm A Low - 50, 150 200, 200 Suppose both firms are run by cautious managers who use maximin strategies when making decisions like this one. If both managers choose their maximin strategies, what will be the outcome of this game? Suppose instead that the firms' managers are not so cautious and each tries to maximize profit given the other firm's choice of advertising budget. Find the Nash equilibrium (or equilibria) for this game. The only Nash equilibrium is where both firms choose the high advertising budget There are two Nash equilibria where one firm chooses the high budget and the other chooses the low budget There are two Nash equilibria, one where both choose the high budget and the other where both choose the low budget The only Nash equilibrium is where both firms choose the low advertising budgetTwo similar firms compete against each other by choosing their advertising budgets. Each can choose either a high or a low budget. The profits (in thousands of dollars) for each possible combination of high and low budgets are shown in the payoff matrix below. Firm A's profits are on the left side of each cell, and Firm B's profits are on the right. Firm B High Low High 100, 100 150, -50 Firm A Low -50, 150 200, 200 Suppose both firms are run by cautious managers who use maximin strategies when making decisions like this one. If both managers choose their maximin strategies what will be the outcome of this game? Suppose instead that the firms' managers are not so cautious and each tries to maximize profit given the other firm's choice of advertising budget. Find the Nash equilibrium (or equilibria) for this game. If the firms could cooperate before choosing their advertising budgets, what will be the outcome of this game? Both would choose low advertising budgets Both would choose high advertising budgets Firm A would choose the low budget and Firm B would choose the high budget C Firm A would choose the high budget and Firm B would choose the low budget
