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Table 14-1

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?

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Star Connections increases its advertising budget, but Godrickporter does not.

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There is no Nash equilibrium.

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Both Godrickporter and Star Connections increase their advertising budgets.

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Godrickporter increases its advertising budget, but Star Connections does not.

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