-Two Software Firms Have Developed an Identical New Software Application

question 142

Multiple Choice

-Two software firms have developed an identical new software application. They are debating whether to give the new app away free and then sell add-ons or sell the application at $30 a copy. The payoff matrix is above and the payoffs are profits in millions of dollars. What is the Nash equilibrium of the game?

• A) Both Firm 1 and 2 will sell the software application at $30 a copy.
• B) Both Firm 1 and 2 will give the software application away free.
• C) Firm 1 will give the application away free and Firm 2 will sell it at $30.
• D) There is no Nash equilibrium to this game.

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Financial incentives provided by governments to employers to encourage the hiring of certain groups of people, reducing unemployment.

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