Two firms are considering which of two markets to enter. The markets are located in different cities.
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Two firms are considering which of two markets to enter. The markets are located in different cities. They have the following profit matrix:
If both firms move simultaneously, does either firm have a dominant strategy? Is there a Nash equilibrium? How does your answer change if the local government for Market 1 provides a subsidy of 3 for firms that set up a new business in the city?
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