Following the outbreak of Covid-2030, two firms, Astra-Life and Bizer, hereafter Firm A and Firm B respectively,
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Question:
Following the outbreak of Covid-2030, two firms, Astra-Life and Bizer, hereafter Firm A and Firm B respectively, are bidding for a government R&D contract. The lowest bid gets the contract (coin toss in the event of a tie). The government will not pay more than $5 billion and requires that bids are an integer between $2 billion to $5 billion The winner of the auction receives their bid to develop a vaccine for Covid-2030.
The R&D cost is $2 billion– the same for both firms.
Create the payoff matrix for this game.
Are there any strictly-dominated strategies?
Are there any weakly-dominated strategies?
Find all the Nash equilibria.
Related Book For
Construction accounting and financial management
ISBN: 978-0135017111
2nd Edition
Authors: Steven j. Peterson
Posted Date: