Sony and Zenith Must Each Decide Which Technology to Utilize

Sony and Zenith must each decide which technology to utilize in building their 2002 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 between Alpha and Beta will be made simultaneously. Answer the following questions:
-List the Nash equilibrium cells for this simultaneous decision: ____________ .
Now suppose that Sony decides to make a strategic commitment to one of the technologies so that it can make the first move in a sequential decision game.