Microsoft and a smaller rival often have to select from one of two competing technologies, A and B. The rival always prefers to select the sametechnology as Microsoft (because compatibility is important), while Microsoft always wants to select a different technology from its rival. If the twocompanies select different technologies, Microsoft's payoff is 2 units of utility, while the small rival suffers a loss of utility of 1. If the two companiesselect the same technology, Microsoft suffers a loss of utility of 1 while the rival gains 1 units of utility.Using the given information, fill in the payoffs for each cell in the matrix, assuming that each company chooses its technology simultaneously.MicrosoftTechnology ATechnology BMicrosoftRival:MicrosoftTechnology A Rival:RivalMicrosoftRival:MicrosoftTechnology B Rival:True or False: There is an equilibrium for this game in pure strategies.O TrueO False

Game theory is the study of the behaviors of players in a game where one player's actions are…

Answered: Technology Microsoft Rival: Microsoft…

Technology Microsoft Rival: Microsoft Technology A Rival: Rival Microsoft Rival: Microsoft Technology B Rival: True or False: There is an equilibrium for this game in pure strategies. O True

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Microsoft and a smaller rival often have to select from one of two competing technologies, A and B. The rival always prefers to select the same
technology as Microsoft (because compatibility is important), while Microsoft always wants to select a different technology from its rival. If the two
companies select different technologies, Microsoft's payoff is 2 units of utility, while the small rival suffers a loss of utility of 1. If the two companies
select the same technology, Microsoft suffers a loss of utility of 1 while the rival gains 1 units of utility.
Using the given information, fill in the payoffs for each cell in the matrix, assuming that each company chooses its technology simultaneously.
Microsoft
Technology A
Technology B
Microsoft
Rival:
Microsoft
Technology A Rival:
Rival
Microsoft
Rival:
Microsoft
Technology B Rival:
True or False: There is an equilibrium for this game in pure strategies.
O True
O False

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