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Satsume Satsume
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6 years ago
The two largest auto manufacturers, Toyota and GM, have experimented with hydrogen powered cars in the past, and they are currently considering the decision to introduce a hydrogen powered car into the commercial automobile market.  The payoffs from the possible actions are measured in millions of dollars per year, and the possible outcomes are summarized in the following game matrix:

   GM produces   GM does not produce
Toyota produces   -10, -10   50, 0
Toyota does not produce   0, 40   0, 0


If both firms enter the market simultaneously, what is the Nash equilibrium?
A) Toyota produces and GM does not produce.
B) GM produces and Toyota does not produce.
C) There are two Nash equilibria - GM produces and Toyota does not produce, or Toyota produces and GM does not produce.
D) There is no Nash equilibrium in this game.
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Microeconomics

Microeconomics


Edition: 8th
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CanihCanih
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6 years ago
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