Suppose two firms are trying to decide how much to budget for research and development. Once a new discovery is made, each firm benefits regardless of which firm developed the innovation. In this R&D game of chicken, the Nash equilibrium will be that
A) neither firm conducts the R&D.
B) one firm conducts the R&D but which firm does the R&D cannot be determined.
C) both firms conduct the R&D.
D) either both firms conduct the R&D or neither firm conducts the R&D.
Correct Answer:
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