Two pipeline firms are contemplating entry into a market delivering crude oil from a port to a refinery. Pipeline 1, the larger of the two firms, is contemplating its capacity strategy, which we might broadly characterize as "aggressive" and "passive." The "aggressive" strategy involves a large increase in capacity aimed at increasing the firm's market share, while the passive strategy involves no change in the firm's capacity. Pipeline 2, the smaller competitor, is also pondering its capacity expansion strategy; it will also choose between an "aggressive strategy" or a "passive strategy." The following table shows the present value of the profits associated with each pair of choices made by the two firms:

a) If both firms decide their strategies simultaneously, what is the Nash equilibrium?
b) If Pipeline 1 could move first and credibly commit to its capacity expansion strategy, what is its optimal strategy? What will Pipeline 2 do?

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Pipeline 2 Aggressive Passive 75,25 100, 30 Pipeline 1 ressive7 Passive 90, 45 110,40