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Suppose that the market for credit cards is a duopoly comprised of two companies Vita (V) and MisterCard (M)

Economics

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Suppose that the market for credit cards is a duopoly comprised of two companies Vita (V) and MisterCard (M). Suppose that Vita is the industry leader. Therefore, Vita gets to pick how many cards issue first. Then, MisterCard finds out how much Vita has produced and picks an output level. Assume that Vita's output choices are 1000 and 2000 and that MisterCard's output choices are 400 and 800. This situation is depicted using a payoff matrix below. Vita (6) Q-1000 Q-2000 MisterCard (M) Q-400 V-45,000 M 18,000 V 30,000 M - 12,000 Q-800 V 43,500 M-35,000 V-28,700 M - 23500 a) Find the Stackelberg Equilibrium. Now assume that Vita and MisterCard move simultaneously. That is, they decide to produce without knowing how much each other are producing, b) Does Vita have a dominant strategy? If so, what is it? c) Does MisterCard have a dominant strategy? If so, what is it? d) Find the Nash Equilibrium for this game.