Consider a two-player game between Child’s Play and Kid’s Korner, each of which produces and sells wooden swing sets for children. Each player can set either a high or a low price for a standard two-swing, one-slide set. If they both set a high price, each receives a profit of $60,000 per year. If one sets a low price and the other sets a high price, the low-price firm earns profits of $80,000 per year, while the high-price firm earns $20,000 per year. If they both set a low price, each receives profits of $40,000 per year.
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