Question: please help me answer this question , thanks ! (a) William and Tiffany are running two competing restaurants in Sai Ying Pun. Currently, William is

please help me answer this question , thanks !

please help me answer this question , thanks ! (a) William and

(a) William and Tiffany are running two competing restaurants in Sai Ying Pun. Currently, William is earning a profit of $500,000, and Tiffany's profit is $400,000. They are simul- taneously deciding whether to launch an advertising campaign. If William and Tiffany do not advertise, their profits will stay unchanged. If William and Tiffany advertise, their ef- fort will fully offset each other and their profits will decrease to $400,000 and $250,000 re- spectively. If William advertises but Tiffany does not, William's profit becomes $650,000 and Tiffany's profit is lowered to $100,000. If Tiffany advertises but William does not. Tiffany's profit becomes $500,000 but William's profit drops to $250,000. (i) Represent the above scenario through a normal form game with William as the row player and Tiffany as the column player. Consequently, note that the first payoff in each box should be William's and the second payoff should be Tiffany's. (ii) Is there a dominant strategy for either player? Is there a dominant strategy equilibrium? (iii) Identify the set of Nash equilibrium? Is the Nash equilibrium outcome efficient? Ex- plain. (iv) Now suppose William can move first by committing to advertise or not before Tiffany does. Represent the resultant strategic situation through a proper game tree. What is the backward induction based rollback equilibrium outcome in the resultant game

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