Two firms (RowGen and ColCom) are considering either releasing
their new product line this month or next month (thus, they have
two strategies “Now” and “Later”). Both firms benefit from
releasing their product sooner than their competitor, but if they
release at the same time, then they compete directly with each
other and harm each others prominence on the market. This strategic
interaction is presented in normal-form in Table 2. The lower-left
number in each cell represents the payoff to RowGen from its
strategy, while the upper-right numbers represent the payoff to
ColCom from its strategy. For example, if ColCom chooses “Later”
and RowGen chooses “Now,” then ColCom receives 0 and RowGen
3(a). Does either of the firms have a dominant strategy? If so,
what is it? Provide your reasoning.
3(b). What is the Nash Equilibrium of this game? Explain why it
is the equilibrium of the game.
3(c). Is there an outcome that would be better (for both firms)
than the Nash Equilibrium? Explain your answer.
Show transcribed image text Table 2: Normal-Form Game for Two Firms, RowGen and ColCom ColCom- Now Later Row Gent Now Later
Table 2: Normal-Form Game for Two Firms, RowGen and ColCom ColCom- Now Later Row Gent Now Later