Exhibit 15A-1
Suppose GM and Nucor Steel seek to develop jointly a new sheet metal and auto body stamping machine,and each party knows the payoffs in the following table of equi-probable outcomes but cannot independently verify one another's costs.Both GM and Nucor can cancel the project and both will then earn $0 if the cost revelations give early warning of losses.

Note: The figures in parentheses represent costs associated with the Low and High cost realizations,and all figures are in millions.The joint profit payoffs are the difference between $180 and the sum of the cost realizations.
-What are the expected net profits to Johnson & Johnson in a pharmaceutical R&D joint venture with Amgen given the following joint profit payoffs.The joint profit payoffs are the difference between $180 and the sum of the cost realizations.Assume that the three columns are equally likely to occur,each row is equally likely to occur.Both Johnson and Johnson and Amgen can cancel the project and both will then earn $0 if the cost revelations give early warning of losses.
The figures in parentheses represent costs associated with the Low,Moderate and High cost realizations,and all figures are in millions.

Question

Exhibit 15A-1
Suppose GM and Nucor Steel seek to develop jointly a new sheet metal and auto body stamping machine,and each party knows the payoffs in the following table of equi-probable outcomes but cannot independently verify one another's costs.Both GM and Nucor can cancel the project and both will then earn $0 if the cost revelations give early warning of losses.
  
Note: The figures in parentheses represent costs associated with the Low and High cost realizations,and all figures are in millions.The joint profit payoffs are the difference between $180 and the sum of the cost realizations.
-What are the expected net profits to Johnson & Johnson in a pharmaceutical R&D joint venture with Amgen given the following joint profit payoffs.The joint profit payoffs are the difference between $180 and the sum of the cost realizations.Assume that the three columns are equally likely to occur,each row is equally likely to occur.Both Johnson and Johnson and Amgen can cancel the project and both will then earn $0 if the cost revelations give early warning of losses.
  The figures in parentheses represent costs associated with the Low,Moderate and High cost realizations,and all figures are in millions.

Quizplus · Accepted Answer

The Answer of Exhibit 15A-1
Suppose GM and Nucor Steel seek to develop jointly a new sheet metal and auto body stamping machine,and each party knows the payoffs in the following table of equi-probable outcomes but cannot independently verify one another's costs.Both GM and Nucor can cancel the project and both will then earn $0 if the cost revelations give early warning of losses.
  
Note: The figures in parentheses represent costs associated with the Low and High cost realizations,and all figures are in millions.The joint profit payoffs are the difference between $180 and the sum of the cost realizations.
-What are the expected net profits to Johnson & Johnson in a pharmaceutical R&D joint venture with Amgen given the following joint profit payoffs.The joint profit payoffs are the difference between $180 and the sum of the cost realizations.Assume that the three columns are equally likely to occur,each row is equally likely to occur.Both Johnson and Johnson and Amgen can cancel the project and both will then earn $0 if the cost revelations give early warning of losses.
  The figures in parentheses represent costs associated with the Low,Moderate and High cost realizations,and all figures are in millions.

Exhibit 15A-1 Suppose GM and Nucor Steel Seek to Develop Jointly a Jointly