Describe the payoffs if Player 2 accommodates vs if they start a price war.

PurposeThis assignment is designed to provide you with the opportunity to communicate about technical and abstract material in a clear and straightforward manner. You will spend some time each week writing up a response to a question/prompt, and then posting that on a discussion board that your peers will review. By doing this each week, you’ll get practice writing about technical matters. DirectionsHere is the prompt. In 500 words, write an answer to the following question:Discussion PromptLet’s consider a scenario where one company (call them Player 1) wants to enter an industry. If they enter, an incumbent company (call them Player 2) can do one of two things. The incumbent can engage in a price war, which will hurt both companies because prices will drop too low, or the incumbent can accommodate the new player, and share the profits. Here is the extensive form of this scenario: Accom +——-> (x3) 2, 2In | +——-> 2—+ (x1) | | | +——-> (x4) -1, -1 1—+ (x0) War | | +—–> (x2) 0, 4 OutThis is an ascii-art version of an extensive-form game. The players are labeled 1 and 2, the nodes are labeled x0, x1, x2, x3, and x4, the strategies are written by each branch, and the payoffs are listed at each leaf node. Player 1 can choose to go “In” or “Out” (i.e., they can choose to enter the industry, or stay out), and Player 2 can choose to engage in “War” (a price cutting war), or they can choose to “Accom” (they can accommodate Player 1).What are the Nash equilibria for this game?In your answer, be sure to complete the following tasks:Describe the payoffs if Player 1 stays out of the industry.Describe the payoffs if Player 2 accommodates vs if they start a price war.Write down Player 1’s strategy set.Write down Player 2’s strategy set.Write down this game in matrix form (make a table in your document).Compute the Nash equilibria for this game, and report all Nash equilibria for this game.Next week, you will review each other’s answers to this question. To review the assignment, you will basically check that your peer completed each of the tasks — (a) through (f) — listed above, and you will assign 1 point for each completed task. To make this explicit, you will use the rubric below to assign points.Click the Reply button below to post your response. SubmissionGradingIn next week’s module, one of your tasks will be to go back and review what your peers wrote. The rubric that you will use to review each other’s answers is as follows. You can also click on the Options icon at the top right corner of this forum (three dots) and select the Show Rubric button. TaskPointsCriteria a 1Did the author describe the payoffs if Player 1 stays out of the industry, and does the author’s description match the extensive-form diagram? b 1Did the author describe the payoffs if Player 2 accommodates vs if they start a price war, and does the author’s description match the extensive-form diagram? c 1Did the author write down Player 1’s strategy set, and does that strategy set accord with the extensive-form diagram? d 1Did the author write down Player 2’s strategy set, and does that strategy set accord with the extensive-form diagram? e 1Did the author write down the game in matrix form, and does that matrix accord with the extensive-form diagram? f1Did the author compute and report all Nash equilibria in the matrix, and are they correct?So, you will be awarded 1 point for completing each of the tasks (a)–(f), to earn a total of 6 points. To ensure that you get all 6 points, make sure to write clearly and concisely, and make it very obvious to your reader that you have in fact answered each of (a)–(f).Be straightforward and honest, and write in as simple a way as possible.