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1. Consider the following game that represents the payoffs from different advertising campaigns (low, medium, and high spending) for two political candidates that are running for a particular office. The values in the payoff matrix represent the share of the popular vote earned by each candidate:
Candidate B - low
Candidate B - medium
Candidate B - high
Candidate A - low
50, 50
40, 60
20, 80
Candidate A - medium
60, 40
35, 65
Candidate A - high
80, 20
65, 35
A) The Nash equilibrium occurs where both candidates use medium advertising campaigns.
B) If candidate A has a first-mover advantage, he will choose a low-spending advertising campaign, and Candidate B will respond with a high-spending advertising campaign.
C) The Nash equilibrium for the sequential and simultaneous versions of the game are identical.
D) There is no Nash equilibrium (in pure strategies) for this game.
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