Synergy and Dynaco are the only two firms in a specific high-tech industry. They face the following payoff matrix as they decide upon the size of their research budget: Synergy's Decision Large Budget Small Budget Dynaco's Decision Large Budget $20 million, $25 million $15 million, $0 Small Budget $0, $60 million $25 million, $30 million If Synergy believes Dynaco will go with a large budget, it will choose a budget. If Synergy believes Dynaco will go with a small budget, it will choose a budget. Therefore, Synergy a dominant strategy. If Dynaco believes Synergy will go with a large budget, it will choose a budget. If Dynaco believes Synergy will go with a small budget, it will choose a budget. Therefore, Dynaco a dominant strategy. True or False: There is a Nash equilibrium for this scenario. (Hint: Look closely at the definition of Nash equilibrium.) True False

Respuesta :

Based on the information given, If Synergy believes Dynaco will go with a large budget, it will choose a large budget.

If Synergy believes Dynaco will go with a small budget, it will choose a large budget. Therefore, Synergy has a dominant strategy.

If Dynaco believes Synergy will go with a large budget, it will choose a large budget. If Dynaco believes Synergy will go with a small budget, it will choose a small budget. Therefore, Dynaco does not have a dominant strategy.

In conclusion. it has a Nash equilibrium.

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