Synergy and Dynaco are the only two firms in a specific high-tech industry. They face the following payoff matrix as they decide upon the size of their research budget:

a. Does Synergy have a dominant strategy? Explain.
b. Does Dynaco have a dominant strategy? Explain.
c. Is there a nash equilibrium for this scenario? Explain.

Transcribed Image Text:

Synergy's Decision Large Budget Small Budget Synergy galns $20 million Synergy galns 2ero Large Budget Dynaco gains $30 million Dynaco gains $70 million Dynaco's Decision Synergy galns $30 millilen Synergy gains $40 milion Small Budget Dynaco galns zero Dynaco gains $50 million