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
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 2 units of utility, while the small rival suffers a lossof utility of 1. If the two companies select the same technology, Microsoft suffers a lossof utility of 1 while the rival 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.
| Microsoft | |||
| Technology A | Technology B | ||
| Rival | Technology A | Rival: ,Microsoft | Rival: ,Microsoft |
| Technology B | Rival: ,Microsoft | Rival: ,Microsoft |
True or False: There is an equilibrium for this game in pure strategies.
True
False
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