Question

Apple and Google simultaneously choose the amount of money xA and xG to con-tribute towards research and development of internet television. The revenue of each firm i is Ri(xi) =(110−32xi−xj)·xi and the cost of research and development is Ci= 10xi. In a Nash equilibrium

(a) each firm contributes 25

(b) each firm contributes 50

(c) either Apple contributes 50 and Google contributes 0 or vice versa

(d) none of the above

Answer 1