Question: Two software rms. Alpha and Beta. are planning to launch their new e-commerce products. Each rm can develop either a Type X or a Type


Two software rms. Alpha and Beta. are planning to launch their new e-commerce products. Each rm can develop either a Type X or a Type Y e-commerce software system. They will make independent decisions simultaneously without communicating with each other. Results of past market survey indicate that the potential payoffs to these two rms are determined by the following conditions. I If both rms launch Type X product. the price of this product will be S 1200 per unit for both rms. The production cost of Type X product for Alpha is $700 per unit while Beta needs to spend $800 to produce one unit of the same product. I If both rms launch Type Y product. the product will be sold at $600 per unit by both rms. The production cost of Type Y product for Alpha is S450 per unit while Beta needs to spend $400 to produce one unit of the same product. I If Alpha launches Type X product while Beta launches Type Y product, the price of Type X product will be $1300 while the price of Type Y system will be $850. The production cost for each product by each rm is assumed to be the same as stated above. I If Alpha launches Type Y product while Beta launches Type X product. the price of Type X product will be 81000 while the price of Type Y system will be $1350
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