Suppose that Wal-World and Tarbo are independently deciding whether to implement a new bar code technology or use the existing bar code. It is less costly for their suppliers to use one system and the following payoff matrix shows the profits per year for each company resulting from the interaction of their strategies.

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Existing bar code technology Wal-World earns $4 billion Tarbo earns $3 billion Wal-World earns $1 billion Tarbo earns $2 billion Wal-World New bar code technology earns $3 billion Wal-World earns $2 billion Tarbo earns $1 Tarbo earns $4 billion billion Existing bar code technology Wal-World earns $4 billion Tarbo earns $3 billion Wal-World earns $1 billion Tarbo earns $2 billion Wal-World New bar code technology earns $3 billion Wal-World earns $2 billion Tarbo earns $1 Tarbo earns $4 billion billion

Answer rating: 100% (QA)

Based on the payoff matrix it appears that both WalWorld and Tarbo would be better off switching to the new bar code technology regardless of what the other company decides If WalWorld keeps the exist... View the full answer