Y7

4. Property developer A is considering whether to develop a new office building in a section of Beijing. If developing, must invest 110 million yuan; No developing, zero capital investment. The real estate market is full of risks, which first comes from the uncertainty of market demand. Another risk is rival developer B. If there are two buildings (one is developed by A, and another is developed by B) for sale in the market, the price of each building can reach 140 million yuan when the demand is high, and the price is 70 million yuan when the demand is low. If only one building is sold, when demand is high, the price is 180 million yuan and is 120 million yuan when the demand low. Q1: If the market demand is high, What are the Nash Equilibria? Q2: If the market demand is low, A is the first mover and B is the later one. What are the Nash Equilibria? (20)