Intel and AMD are the dominant central processing unit manufacturers. Assume they play the following game once
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Intel and AMD are the dominant central processing unit manufacturers. Assume they play the following game once and act simultaneously. Their profits are symmetric (which is consistent with the estimates of Salgado, 2008). If both choose low levels of advertising, Intel's profit, \(\pi_{I}\), and AMD's profit, \(\pi_{A}\), are each 2 . If both choose high, each earns 3. If Intel's advertising is high and AMD's is low, \(\pi_{I}=8\) and \(\pi_{A}=4\). If Intel's advertising is low and AMD's is high, \(\pi_{I}=4\) and \(\pi_{A}=8\). Describe how each firm chooses its strategy? Describe the Nash equilibrium or equilibria.
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