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    Microsoft and Intel- Competition or coordination

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    Suppose Microsoft can produce a new sophisticated sofeware product. However, it wants to do so only if Intel produces high speed microprocessors. Otherwise, the software will not sell. Intel, in turn, wants to produce high-speed microprocessor only if there is popular softwar on the market that requires high speed processing. Is this a game of competition or coordination? What is the equilibrium?

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    Solution Preview

    It is a game of coordination. The coordination game is a classic two player strategy in which the players should cooperate with each other to receive maximum payoff. In this case ...

    Solution Summary

    This solution discusses whether Microsoft and Intel are playing a game of competition or coordination.