Explore BrainMass

Explore BrainMass

    Nash Equilibrium: Math or chip research

    Not what you're looking for? Search our solutions OR ask your own Custom question.

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Consider two firms, A and B, that produce super computers. Each can produce the next generation super computer
    for math (M) or for chip research (C). However, only one can successfully produce for both markets
    simultaneously. Also, if one produces one type, the other might not be able to successfully produce the same type,
    because of the limited market. The following payoff matrix illustrates the problem.

    Does a Nash equilibrium exist ? (Answer yes or No). If a nash equilibrium exists, give the payoffs.

    **(Firm B should be across the top of the rectangle like this, with the numbers inside)
    Firm B
    M C
    Firm A: M 2,1 2,2
    C 1,1 3,2

    © BrainMass Inc. brainmass.com October 7, 2022, 6:00 pm ad1c9bdddf

    Solution Preview

    Firm B has a dominant strategy - Strategy C. Irrespective of whatever strategy Firm A takes, Firm B would always take strategy C.
    Firm A does not have a dominant ...

    Solution Summary

    Nash equilibrium evaluation is performed.