Briefly describe the Nash equilibrium concept.
Mars and Hersheys dominate the domestic chocolate candy bar business. In this mature market advert Show more Mars and Hersheys dominate the domestic chocolate candy bar business. In this mature market advertising by individual firms does little to convince more people to eat candy. Effective advertising simply steals sales from rivals. Big profit gains could be had if these rivals could simply agree to stop advertising. Assume Mars and Hersheys are trying to set optimal advertising strategies. Mars can choose either row in the payoff matrix defined below whereas Hersheys can choose either column. The first number in each cell is Mars payoff; the second number is the payoff to Hersheys. This is a one-shot simultaneous-move game and the first number in each cell is the profit payoff to Mars. The second number is the profit payoff to Hersheys. A. Briefly describe the Nash equilibrium concept. B. Is there a Nash equilibrium strategy for each firm? If so what is it? Show less
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