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:   Synergy's Decision Large Budget Small Budget Dynaco's Decision Large Budget $40 million, $30 million $60 million, $0 Small Budget $0, $30 million $50 million, $40 million   If Synergy believes Dynaco will go with a large budget, it will choose a    budget. If Synergy believes Dynaco will go with a small budget, it will choose a    budget. Therefore, Synergy    a dominant strategy.   If Dynaco believes Synergy will go with a large budget, it will choose a    budget. If Dynaco believes Synergy will go with a small budget, it will choose a    budget. Therefore, Dynaco    a dominant strategy.   True or False: There is a Nash equilibrium for this scenario. (Hint: Look closely at the definition of Nash equilibrium.) True   False

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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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:
  Synergy's Decision
Large Budget Small Budget
Dynaco's Decision Large Budget $40 million, $30 million $60 million, $0
Small Budget $0, $30 million $50 million, $40 million
 
If Synergy believes Dynaco will go with a large budget, it will choose a    budget. If Synergy believes Dynaco will go with a small budget, it will choose a    budget. Therefore, Synergy    a dominant strategy.
 
If Dynaco believes Synergy will go with a large budget, it will choose a    budget. If Dynaco believes Synergy will go with a small budget, it will choose a    budget. Therefore, Dynaco    a dominant strategy.
 
True or False: There is a Nash equilibrium for this scenario. (Hint: Look closely at the definition of Nash equilibrium.)
True
 
False
 
 
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