In the technology choice game presented in Figure 13.4, draw the game tree when Sony makes its
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In the technology choice game presented in Figure 13.4, draw the game tree when Sony makes its technology decision first. Find the outcome of the game using the roll-back method. Does Sony experience a first-mover advantage? Explain.
Figure 13.4
Transcribed Image Text:
Motorola's technology Analog Digital A B Analog $10, $13.75 $8, $9 Sony's technology Digital $9.50, $11 $11.875, $11.25 Payoffs in millions of dollars of profit annually Panel A – Simultaneous technology decision Sony, Motorola Digital $11.875, $11.25 Sony 2 Digital Analog $8, $9 Motorola 1 Digital $9.50, $11 Sony 2 Analog Analog > $10, $13.75 Panel B – Motorola secures a first-mover advantage
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Managerial Economics Foundations of Business Analysis and Strategy
ISBN: 978-0078021909
12th edition
Authors: Christopher Thomas, S. Charles Maurice
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