Two pizza shops have just opened on campus: Giuseppe’s Pizza

Two pizza shops have just opened on campus: Giuseppe€™s Pizza and Capri€™s Pizza. The €œpricing game€ these competitors fact can be described in simple terms as follows: Each of them has to choose a price (high, medium, or low) for its €œdouble cheese pizza,€ and the profitability of each choice depends on the price that the rival chooses. The situation is depicted in the accompanying table, where Giuseppe€™s Pizza is the row player and Capri€™s pizza the column player. Profits are expressed in hundreds of dollars.

(a) What is the Nash equilibrium (or equilibria) of the game? Is (high, high) a Nash equilibrium? Explain.
(b) If these players play this game twice, what would be your prediction? What if they play it over and over again?Explain.

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