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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 Summary

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

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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 provided by:
Sandeep Bardia, MBA
Education
  • BCom, SGTB Khalsa College, University of Delhi
  • MBA, Rochester Institute of Technology
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