Assume that two interior design companies, Alistair and Baine, are competing for customers and, if they both advertise, they would each earn $30 million in profits. If neither advertises, they each earn $50 million in profits. If one advertises and the other doesn't, the firm that advertises earns $40 million in profit while the other earns $20 million in profit.
1. Present the information above in the form of a payoff matrix. Let Baine be the row player and Alistair the column player. No words are required only payoff matrix
2. Define Nash equilibrium. What is (are) the Nash equilibrium(s) in this game. Explain.
3. Define dominant strategy. Is there a dominant strategy for Baine and, if so, what is it? Explain.