Walmart and Target are competitors. Both are considering an increase in advertising expenditures. The profits from their independent alternatives are described in the payoff matrix below (the first entry is for Walmart).
Target
Advertise Don't Advertise
Walmart Advertise ($6,000 ; $4,000) ($9,000 ; $5,000)
Don't Advertise ($3,000 ; $7,000) ($8,000 ; $6,000)
1. Determine whether each store has a dominant strategy and state it below:
Walmart...?
Target...?
2. Determine the Nash equilibrium