Intel and Applied Micro devices are the 2 major producers of CPU chips used in personal computers. They can each research and enhance their Chips computational speed, reduce their power consumption, or enhance their graphics ability. The economic profit depends on each company's choice of which attribute to research. The payoff matrix shows each firms hypothetical economic profit for all possible choices. What is the Nash equilibrium of this game? Explain the answer

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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Intel and Applied Micro devices are the 2 major producers of CPU chips used in personal computers. They can each research and enhance their Chips computational speed, reduce their power consumption, or enhance their graphics ability. The economic profit depends on each company's choice of which attribute to research. The payoff matrix shows each firms hypothetical economic profit for all possible choices. What is the Nash equilibrium of this game? Explain the answer

 

 

Applied Micro
Devices
Enhance
Speed
Reduce
Power
Consumption
Enhance
Graphics
Enhance
Speed
$12 billion
$2 billion
$17 billion
$5 billion
$16 billion
$4 billion
Intel
Reduce Power
Consumption
$7 billion
$4 billion
$14 billion
$6 billion
$8 billion
$6 billion
Enhance
Graphics
$7 billion
$4 billion
$8 billion
$5 billion
$9 billion
$6 billion
Transcribed Image Text:Applied Micro Devices Enhance Speed Reduce Power Consumption Enhance Graphics Enhance Speed $12 billion $2 billion $17 billion $5 billion $16 billion $4 billion Intel Reduce Power Consumption $7 billion $4 billion $14 billion $6 billion $8 billion $6 billion Enhance Graphics $7 billion $4 billion $8 billion $5 billion $9 billion $6 billion
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