Question: 2. Consider the advertisement war between two firms A and B. If the both firms spend heavily on advertising, the both get 0 as a

2. Consider the advertisement war between two

2. Consider the advertisement war between two firms A and B. If the both firms spend heavily on advertising, the both get 0 as a payoff. If only one firm spends heavily on advertising while the other firm does not, the firm which heavily advertised gets 3 and the other firm gets 1. If both of the firms do not spend heavily on advertising, the both firms get 2. a. Describe the above game in a normal form. b. Find all Nash Equilibrium(a) in this game. (Consider both pure and mixed strategies.) 3. Now suppose the game in Question 2 is played sequentially, with A moving first. a. Describe the above game in an extensive form. b. Use the backward induction to find Subgame Perfect Equilibrium(a) c. Find all pure strategy Nash Equilibrium(a) in this sequential game. Explain why some of the NE you found are unreasonable

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