Two firms, X and Y, are planning to market their new products. Each firm can develop TV, Laptop. Market research indicates that the resulting profits to each firm for the alternative strategies are given by the following payoff matrix : MATRIX IS ATTACHEDFind the Nash equilibria for this game, assuming that both firms make their decisions at the same time. (explain the decision step by step) If each firm is risk averse and uses a maximin strategy, what will be the resulting equilibrium? (explain the decision step by step)What will be the equilibrium if Firm X makes its selection first? If Firm Y goes first? FIRM YTVLAPTOPPHONEFIRM XTV30, 3060 , 3520, 50LAPTOP40,7020, 2050,80PHONE50,2080,5010,10

Part a) There is two Nash equilibria i.e., (laptop,phone) and ( phone , laptop ). The payoff for…

Answered: Find the Nash equilibria for this game,…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Two firms, X and Y, are planning to market their new products. Each firm can develop TV, Laptop. Market research indicates that the resulting profits to each firm for the alternative strategies are given by the following payoff matrix : MATRIX IS ATTACHED

Find the Nash equilibria for this game, assuming that both firms make their decisions at the same time. (explain the decision step by step)
If each firm is risk averse and uses a maximin strategy, what will be the resulting equilibrium? (explain the decision step by step)
What will be the equilibrium if Firm X makes its selection first? If Firm Y goes first?

FIRM Y
TV
LAPTOP
PHONE
FIRM X
TV
30, 30
60 , 35
20, 50
LAPTOP
40,70
20, 20
50,80
PHONE
50,20
80,50
10,10

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