Determine does either firm have a dominant strategy

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Consider the following game between Sony, a manufacturer of video cassette players, and Columbia Pictures, a movie studio. Each firm must decide whether to use the VHS or Beta format - Sony to make video players, Columbia to release its movies for rental or purchase.


Columbia Pictures
Beta VHS
Sony Beta 20, 10 0, 0
VHS 0, 0 10, 20

a) Restrict attention to pure strategies. Does either firm have a dominant strategy? What is (are) the Nash equilibrium (equilibria) of this game?

b) Is there a mixed strategy Nash equilibrium in this game? If so, what is it?

Reference no: EM13233582

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