Two firms (RowGen and ColCom) are considering either releasing their new product

Question

Two firms (RowGen and ColCom) are considering either releasing their new product line month or next month (thus, they have two strategies "Now" and Later"). Both firms benefit fr om releasing their product sooner than their competitor, but if they release at the same time, then they compete directly with each other and harm each others prominence on market. This strategic interaction is presented in normal-form in Table 4. The lower-left number in each cell represents the payoff to RowGen from its strategy, while the upper-right numbers represent the payoff to ColCom from its strategy. For example, if ColCom chooses "Later and RowGen chooses "Now," then ColCom receives 0 and RowGen receives 8. Table 4: Normal-Form Game for Two Fits, RowGen and ColConm Rowden; w Later Now Later 4(a). Does either of the firms have a dominant strategy? If so, what is it? Provide your reasoning 4(b). What is the Nash Equilibrium of this game? Explain why it is the equilbrium of the frins) than the Nash Equilibrium? game. 4(c). Is there an outcome that would be better (for both Explain your answer.

Explanation / Answer

A) Row Gen have dominant strategy as Now and Col com too have dominant strategy as Now because dominant strategy is the one which a player plays irrespective of what other player plays.

B)(Now,Now) is a nash equilibrium because no player wants to deviate given the other player strategy or play

C) yes both can be made better off if both choose to play Later because it is a pareto improvement over (Now,Now).

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