Godrickporter and Star Connections are the only two airport shuttle and limousine rental service companies in the mid-sized town of Godrick Hollow. Each firm must decide on whether to increase its advertising spending to compete for customers. Table 14-1 shows the payoff matrix for this advertising game.
Refer to Table 14-1. What is the Nash equilibrium in this game?
- Godrickporter increases its advertising budget, but Star Connections does not.
- There is no Nash equilibrium.
- Both Godrickporter and Star Connections increase their advertising budgets.
- Star Connections increases its advertising budget, but Godrickporter does not.