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Two Firms in a Local Market Compete in the Manufacture

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Two firms in a local market compete in the manufacture of cyberwidgets. Each firm must decide if they will engage in product research to innovate their version of the cyberwidget. The pay-offs of each firm's strategy is a function of the strategy of their competitor as well. The pay-off matrix is presented below. Two firms in a local market compete in the manufacture of cyberwidgets. Each firm must decide if they will engage in product research to innovate their version of the cyberwidget. The pay-offs of each firm's strategy is a function of the strategy of their competitor as well. The pay-off matrix is presented below.    Does either player have a dominant strategy? Does the game have any Nash equilibria? What is the maximin strategy of each player in the game?
Does either player have a dominant strategy? Does the game have any Nash equilibria? What is the maximin strategy of each player in the game?


Definitions:

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