Gym X and Bodyworks Are Both Going to Open an Exercise

question 55

Essay

Gym X and Bodyworks are both going to open an exercise facility in the local market.Each company may decide to open a facility concentrating on cardio equipment for customers interested in mostly aerobic workouts.Another alternative for each company is to open a facility concentrating on muscle building equipment for customers interested mostly in bodybuilding workouts.The pay-off matrix for each company dependent upon their strategies and that of their competitor is given below. Does either player have a dominant strategy? Does the game have any Nash equilibria? What is the maximin strategy of each player in the game?

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Definitions:

Interest Rate

The percentage of a sum of money charged for its use, typically expressed as an annual percentage.

Total Investment

The total amount of money invested in assets, projects, or securities by individuals, companies, or governments.

Expected Rate

The Expected Rate often refers to the anticipated return or yield on an investment, savings, or any financial product over a specified period.

Market Rate

The prevailing price in the market for goods or services, influenced by supply and demand dynamics.