Answer to Question #2915 in Economics of Enterprise for Jeannie Dodge
Consider two firms, A and B that produce super computers. Each can produce the next generation super computer
for math (M) or for chip research (C). However, only one can successfully produce for both markets
simultaneously. Also, if one produces one type, the other might not be able to successfully produce the same type,
because of the limited market. The following payoff matrix illustrates the problem.
Firm A M 2, 1 2, 2
C 1, 1 3, 2
Does a Nash equilibrium exist? (Answer yes or No). If a nash equilibrium exists, give the payoffs
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