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You and a rival high-frequency trading firm must each decide, independently and simultaneously, whether to Hold (keep your current data line) or Upgrade (pay for a faster line). Monthly profits in arbitrary units are given as (your profit, rival's profit):
Rival: Hold Rival: Upgrade
You: Hold (10, 10) (5, 13)
You: Upgrade (13, 5) (7, 7)Both firms are rational and care only about their own profit. What profit do you earn in the unique pure-strategy Nash equilibrium?