Sony and Zenith must each decide which technology to utilize in building their 2019 model high definition television (HDTV)sets: either Alpha technology or Beta technology.Sony has a technological advantage in using Alpha technology and Zenith has a technological advantage in using Beta technology.The payoff table below shows the profit outcomes for both firms in the various possible technology choice outcomes: Suppose the technology decision will be made sequentially.Sony ________ (does,does not)possess a first-mover advantage,and Zenith ________ (does,does not)possess a first-mover advantage

Question

Sony and Zenith must each decide which technology to utilize in building their 2019 model high definition television (HDTV)sets: either Alpha technology or Beta technology.Sony has a technological advantage in using Alpha technology and Zenith has a technological advantage in using Beta technology.The payoff table below shows the profit outcomes for both firms in the various possible technology choice outcomes:  Suppose the technology decision will be made sequentially.Sony ________ (does,does not)possess a first-mover advantage,and Zenith ________ (does,does not)possess a first-mover advantage

Quizplus · Accepted Answer

Sony has a first-mover advantage because they possess a technological advantage with the Alpha technology. Zenith does not possess a first-mover advantage. Thus, Sony should choose Alpha technology, and Zenith should choose Beta technology. This will result in Sony earning $8 million, and Zenith earning $6 million.

Sony and Zenith Must Each Decide Which Technology to Utilize