4. Use the Table below: Nike and Reebok Sales. Reebok and Nike must decide whether to have a sale or not, based on the potential economic profits shown in the table. Table: Nike and Reebok Sales Reebok Sale No Sale Reebok: $5M Sale Nike Nike: $5M Reebok: $IM Nike: $30M No Sale Reebok: $30M Reebok: $20M Nike: SIM Nike: $20M a.{9} Is there a Nash equilibrium in this game? If there is what is it, and if not, why not? b. (8.5) If Nike and Reebok were to collude to maximize joint profits, what decision should each firm pursue?
4. Use the Table below: Nike and Reebok Sales. Reebok and Nike must decide whether to have a sale or not, based on the potential economic profits shown in the table. Table: Nike and Reebok Sales Reebok Sale No Sale Reebok: $5M Sale Nike Nike: $5M Reebok: $IM Nike: $30M No Sale Reebok: $30M Reebok: $20M Nike: SIM Nike: $20M a.{9} Is there a Nash equilibrium in this game? If there is what is it, and if not, why not? b. (8.5) If Nike and Reebok were to collude to maximize joint profits, what decision should each firm pursue?
Chapter1: Making Economics Decisions
Section: Chapter Questions
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