Question: Suppose two firms, A and B, are simultaneously considering entry into a new market. If neither enters, both earn zero. If both enter, they both

  1. Suppose two firms, A and B, are simultaneously considering entry into a new market. If neither enters, both earn zero. If both enter, they both lose 100. If one firm enters, it gains 50 while the other earns zero. a) Set up the payoff matrix for this game (5 points)
  2. b) How many (if any) Nash equilibria exist in this game? (5 points)

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