Microsoft and a smaller rival often have to select from one of two competing technologies, A and
Question:
Microsoft and a smaller rival often have to select from one of two competing technologies, A and B. The rival always prefers to select the same technology as Microsoft (because compatibility is important), while Microsoft always wants to select a different technology from its rival. If the two companies seleCt different technologies, Microsoft's payoff is 3 units of utility, while the sma I rival suffers a Wei of utility of 1. If the two companies select the same technology, Microsoft suffers a loss of utility of 1 while the nval gains 1 units of utility.
Using the given information, fill in the payoffs for each cell in the matrix, assuming that each company chooses its technology simultaneously.
True or False: There is an equilibrium for this game in pure strategies.
True
False
Managerial Economics A Problem Solving Approach
ISBN: 978-1133951483
3rd edition
Authors: Luke M. Froeb, Brian T. McCann, Mikhael Shor, Michael R. War