inergy and Dinaco are the only two companies in a high-tech industry. They are faced with the following matrix of results when deciding their research budget: After analizing the graph, answer the following questions... a) Does Sinergy have a dominant strategy? Reason your answer. b) Does Dinaco have a dominant strategy? Reas

Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter2: Choice In A World Of Scarcity
Section: Chapter Questions
Problem 6SCQ: Would an op-ed piece in a newspaper urging the adoption of a particular economic policy be a...
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Exercise A.2 .

Sinergy and Dinaco are the only two companies in a high-tech industry. They are faced with the following matrix of results when deciding their research budget:

After analizing the graph, answer the following questions...

a) Does Sinergy have a dominant strategy? Reason your answer.

b) Does Dinaco have a dominant strategy? Reason your answer.

c) Is there a Nash equilibrium in this scenario? Reason your answer.

Dinaco
High
Budget
Low
Budget
High budget
Synergy gets €20 mill.
Dinaco gets €30 mill
Synergy
Synergy gana 30 millones
de euros
Dinaco gets nothing
Low budget
Synergy gets nothing
Dinaco gets €70 mill
Synergy gets €40 mill.
Dinaco gets €50 mill.
Transcribed Image Text:Dinaco High Budget Low Budget High budget Synergy gets €20 mill. Dinaco gets €30 mill Synergy Synergy gana 30 millones de euros Dinaco gets nothing Low budget Synergy gets nothing Dinaco gets €70 mill Synergy gets €40 mill. Dinaco gets €50 mill.
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