Suppose two firms, Genera Pharma and Futura Pharma, are the only two producers of a specific...

 

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Suppose two firms, Genera Pharma and Futura Pharma, are the only two producers of a specific drug. Genera and Futura have the same formula and sell the drug for the same price, but they are considering whether or not to spend money on an advertising campaign. Each firm can either buy the advertising campaign or not buy it and the following table shows profits for four different scenarios. Genera AD No AD AD Futura (4,4) (0,12) No AD (12,0) (8,8) 1. What is the scenario that maximizes the sum of profits of the two companies? 2. Is there a dominant strategy for each firm? 3. What is the pure strategy Nash Equilibrium? 4. Denote the probability of choosing AD for Futura as f and for Genera as g. Find the best response function for Futura, bf (g), and Genera, bg (f). Suppose two firms, Genera Pharma and Futura Pharma, are the only two producers of a specific drug. Genera and Futura have the same formula and sell the drug for the same price, but they are considering whether or not to spend money on an advertising campaign. Each firm can either buy the advertising campaign or not buy it and the following table shows profits for four different scenarios. Genera AD No AD AD Futura (4,4) (0,12) No AD (12,0) (8,8) 1. What is the scenario that maximizes the sum of profits of the two companies? 2. Is there a dominant strategy for each firm? 3. What is the pure strategy Nash Equilibrium? 4. Denote the probability of choosing AD for Futura as f and for Genera as g. Find the best response function for Futura, bf (g), and Genera, bg (f).

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It appears to be a prompt about a position paper on foreign direct investment FDI The prompt asks you to analyze recent FDI trends in your country and ... View the full answer