Suppose Boeing and Airbus Are Both Considering Expanding Their Plant

question 12

Multiple Choice

Suppose Boeing and Airbus are both considering expanding their plant capacity as a strategic move but can't observe their opponent's move until their own move has been determined.The following are time-discounted values of all future profit streams in billions of dollars.Which of the following strategies are Nash equilibria?

• A)(Expand, Expand)
• B)(Expand, Don't)
• C)(Don't, Expand)
• D)(Don't, Don't)
• E)(b)and (c)
• F)None are Nash equilibria.

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