Nash equilibrium
a. is where one player maximizes his payoff and the other doesn't.
b. is where each player maximizes his own payoff given the action of the other player.
c. is where both players are maximizing their total payoff.
d. is a unique prediction of the likely outcome of a game.
Use the following to answer Questions 3-5: Consider the following information for a simultaneous move game: Two discount stores (megastore and superstore) are interested in expanding their market share through advertising. The table below depicts the strategic outcomes (profits) of both stores with and without advertising. Payoffs for Megastore are in blue.
