In the simultaneous-move, one-shot game above, two firms must choose between innovating and entering a new product market (I) and not innovating/not entering (N). The cost of innovating is c. If only one firm innovates, they earn a payoff of (R-c) > 0, while the firm who does not innovate arns zero. If both innovate then they each receive a payoff of (r-c), where r < R (they have to share the market. The outcome of this game (equilibrium or equilibria) depends upon? earns