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(Solved): Synergy and Dynaco are the only two firms in a specific high-tech industry. They face the following ...



Synergy and Dynaco are the only two firms in a specific high-tech industry. They face the following payoff matrix as they decide upon the size of their research budget: Synergy's Decision Large Budget Small Budget Dynaco's Decision Large Budget $40 million, $30 million $60 million, $0 Small Budget $0, $30 million $50 million, $40 million If Synergy believes Dynaco will go with a large budget, it will choose asmall budget. If Synergy believes Dynaco will go with a small budget, it will choose asmall budget. Therefore, Synergydoes not have a dominant strategy. If Dynaco believes Synergy will go with a large budget, it will choose alarge budget. If Dynaco believes Synergy will go with a small budget, it will choose alarge budget. Therefore, Dynaco a dominant strategy. True or False: There is a Nash equilibrium for this scenario. (Hint: Look closely at the definition of Nash equilibrium.) True False



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