Suppose Ford and Honda are considering making electric powered cars. Their payof
ID: 1196862 • Letter: S
Question
Suppose Ford and Honda are considering making electric powered cars. Their payoffs are in the table below and follow the same pattern as the previous problem.
Ford
Enter
Do not enter
Enter
-40
0
Honda
10
Do not enter
200
0
0
0
A. If Ford and Honda make their decision at the same time what do both firms do?
B. Would your answer change if the US Government provided Ford with a $55 million dollar incentive payment to produce electric cars. Does this new information affect the outcome from part A?
Ford
Enter
Do not enter
Enter
-40
0
Honda
10
Do not enter
200
0
0
0
Explanation / Answer
Suppose Ford and Honda are considering making electric powered cars. Their payof
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