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Please see attached picture for question! 1) Consider the following extensive form game of coordination. Firms 1 and 2 must choose between technologies A and
Please see attached picture for question!
1) Consider the following extensive form game of coordination. Firms 1 and 2 must choose between technologies A and B. Firm 1 prefers technology A while rm 2 prefers technology B, but the firms obtain value from coordination. The following extensive form represents the game: _ A1 2,1 Firm 2 / Firm 1 A Bl 0,0 A2 0,0 . 1,2 Flrm 2 Note that this game is not simultaneous. a) Find all the (pure strategy) Nash equilibria of this game b) Which outcomes satisfy the criterion of backward induction? c) Before Firm 2 makes its move, it sees a press release from rm 1 saying that it believes that the industry will converge to technology A. Would such a statement change the outcome of the gameStep by Step Solution
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