Question: Please help with this practice question. At the Nash equilibrium, Starbucks will choose and Bay Brew will respond with 0 Don't Expand ; Price High
Please help with this practice question.


At the Nash equilibrium, Starbucks will choose and Bay Brew will respond with 0 Don't Expand ; Price High 0 There is no Nash equilibrium. 0 Expand; Price High 0 Don't Expand ; Price Low 0 Expand; Price Low Starbucks is deciding whether to expand to more locations in the Bay Area, but they are worried about how their main competitor, Bay Brew, is going to respond. Bay Brew can either respond by pricing their coffee high or pricing their coffee low. The payoffs are given in the following sequential game tree: Price Starbucks: $550K High Bay Brew: $200K Bay Brew 3:8 Starbucks: $450K Starbucks Bay Brew: $150K price Starbucks: $500K High Bay Brew: $300K Bay Brew Pr'ce Starbucks: $600K Low Bay Brew: $250K
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