The U.S. government has decided to build a new off-ramp for Interstate 5 in California. Exxon and Shell are both interested in building a gas station near the new off-ramp. They can build the gas station near the off-ramp for northbound traffic or they could build the gas station near the off-ramp for southbound traffic. The profits, in thousands of dollars, for each outcome are illustrated in the following payoff table:

a. If Exxon and Shell make these decisions simultaneously, what is the Nash equilibrium (or equilibria)? Use the check mark method to help illustrate your answer. b. What happens if Exxon moves first and builds a gas station before Shell? Draw a game tree for this sequential-move game. Your diagram must be clearly labeled and contain all relevant information. c. Use the prune the tree method to illustrate the Nash equilibrium for the sequential move game. What is the Nash equilibrium in this case? 

d. What happens if Shell moves first and builds a gas station before Exxon? Draw a game tree for this sequential-move game. Your diagram must be clearly labeled and contain all relevant information. 

e. Use the prune the tree method to illustrate the Nash equilibrium for the sequential move game. What is the Nash equilibrium in this case?  

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Exxon builds near northbound ramp Exxon builds near southbound ramp Stevenson/Wolfers, Shell builds near northbound ramp Exxon receives $60 thousand profit Shell receives $50 thousand profit Exxon receives $80 thousand profit Shell receives $120 thousand profit Principles of Economics, 1e, Shell builds near southbound ramp Exxon receives $110 thousand profit Shell receives $100 thousand profit Exxon receives $50 thousand profit Shell receives $50 thousand profit 2020 Worth Publishers