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In: Economics

We now have two firms in the automotive market in the U.S., one is Ford the...

We now have two firms in the automotive market in the U.S., one is Ford the other is GM. These firms have two strategies available to them (Cooperate or Defect). The payoffs for their strategies is listed in the 2 x 2 matrix below. A. What will GM do? B. What will Ford do? C. Is there a Nash Equilibrium in this game?

Figure 1: The GM-Fisher body Exchange  

Ford

Cooperate Defect    

(3,3)

(1,2)

(4,0)

(1,1)

Cooperate    

GM    

Defect   

  

  

        

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Rahul Sunny answered 2 years ago
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