Megan lives on the east side of Welch and Amanda resides on the west side of the north-south street. Each morning, the girls must decide whether to place their stand on Welch Avenue or Lincoln. When they set their stand-up, they don't know what the other will do and can't relocate.
If both girls put their stand on Welch, both girls receive $175 profits (big profit business for 7 year old girls - don't you think!!). If both girls put their stand on Lincoln, they each receive $75 in profits. If one girl sets their stand on Welch while the other girl operates on Lincoln, the stand on Welch earns $300 in profits while the stand on Lincoln earns $225.
a. Diagram the relevant payoff matrix.
b. Does either girl have a dominant strategy?
c. Does the game have a Nash equilibrium?
d. What is the maximin strategy of each player in the game?