Consider Two Firms,X and Y,that Produce Super Computers

question 29

Essay

Consider two firms,X and Y,that produce super computers.Each can produce the next generation super computer for the military (M)or for civilian research (C).However,only one can successfully produce for both markets simultaneously.Also,if one produces M,the other might not be able to successfully produce M,because of the limited market.The following payoff matrix illustrates the problem. a.Find the Nash equilibrium,and explain why it is a Nash equilibrium.
b.If Firm X were unsure that the management of Firm Y were rational,what would Firm X choose to do if it followed a maximin strategy? What would both firms do if they both followed a maximin strategy?

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Definitions:

Shaping

Shaping is a method of positive reinforcement in behavioral training where successive approximations toward a desired behavior are rewarded to teach a new behavior.

Reinforcement

A process in behavioral psychology used to increase the likelihood of a specific behavior by adding or removing stimuli following the behavior.

Consciousness

Consciousness is the state of being awake and aware of one's surroundings, thoughts, feelings, and experiences.

Continuous Stream

The ongoing, uninterrupted flow of data or information in real-time.