(Strict and nonstrict Nash equilibria) Which of the Nash equilibria of the game whose best…

(Strict and nonstrict Nash equilibria) Which of the Nash equilibria of the game whose best response functions are given in Figure 39.1 are strict (see the definition on page 31)? Another feature that differentiates the best response functions in Figure 39.1 from those in Figure 38.1 is that the best response function b1 of player 1 is not continuous. When player 2’s action is a2, player 1’s best response is a∗∗ 1 (indicated by the small disk at (a∗∗1 , a2)), but when player 2’s action is slightly greater than a2, player 1’s best response is significantly less than a∗∗1 . (The small circle indicates a point excluded from the best response function.) Again, several examples in the next chapter have this feature. From Figure 39.1 we see that if a player’s best response function is discontinuous, then depending on where the discontinuity occurs, the best response functions may not intersect at all—the game may, like Matching Pennies, have no Nash equilibrium.