# A higher payoff of 5 as compared to a payoff of 4 if

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a higher payoff of 5 as compared to a payoff of 4 if Albert Incorporated does not clean. If the other firm (Victoria Enterprises) does not clean while Albert Incorporated cleans, Albert Incorporated will earn a payoff of 0 while Victoria Enterprises will earn a payoff of 4. If both firms do not clean, each firm will earn a payoff of 1. In this case, it is better not to clean as Albert Incorporated will earn a higher payoff of 1 as compared to a payoff of 0 if Albert Incorporated cleans.
(b) (6 points) Does this game have a dominant strategy? Explain.
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Enterprises does not clean, the company is better off if it does not clean. Albert Incorporated, therefore, does not have a dominant strategy. Taking the case of Victoria Enterprises, if Albert Incorporated cleans, the company is better off if it cleans. However, if Albert Incorporated does not clean, the company is better off if it does not clean. Victoria Enterprises, therefore, does not have a dominant strategy. (c) (4 points) This game has two Nash equilibria. What are they?
(d) (8 points) Suppose we let Victoria move first. Sketch out below the extensive-form "game tree" for this game. Label each "branch" of the game tree and then assign the correct final payoffs at the end of each branch.
(e) (4 points) What would be the equilibrium of this game under (d)? 9
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