Suppose two merchants have to choose a location along the


Question: Suppose two merchants have to choose a location along the straight road. They may choose any point in {1, 2,..., n}. Assume there is exactly one customer at each of these points and a customer will always go to the nearest merchant. If the two merchants are equidistant to a customer then they share that customer, that is, 1 2 the customer goes to each store. For example, if n = 11 and if player I chooses location 3 and player II chooses location 8, then the payoff to I is 5 and the payoff to II is 6. (a) Suppose n = 5. Find the bimatrix and find the Nash equilibrium. (b) What do you think is the Nash equilibrium in general if n = 2k + 1, that is, n is an odd integer.

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Management Theories: Suppose two merchants have to choose a location along the
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