Secure Strategies. Imagine two competitors, Microsoft Corp. and Google, Inc., each facing an important strategic decision concerning the pricing of Internet search technology. Microsoft can choose either row in the payoff matrix defined below, whereas Google can choose either column. For Microsoft and Google, the choices are either "market penetration pricing" or "monopoly pricing." Notice that neither firm can unilaterally choose a given cell in the profit payoff matrix. The ultimate result of this one-shot, simultaneous-move game depends upon the choices made by both competitors. In this payoff matrix, the first number in each cell is the profit payoff to Microsoft; the second number is the profit payoff to Google.

Question

Quizplus · Accepted Answer

The Answer of Secure Strategies. Imagine two competitors, Microsoft Corp. and Google, Inc., each facing an important strategic decision concerning the pricing of Internet search technology. Microsoft can choose either row in the payoff matrix defined below, whereas Google can choose either column. For Microsoft and Google, the choices are either "market penetration pricing" or "monopoly pricing." Notice that neither firm can unilaterally choose a given cell in the profit payoff matrix. The ultimate result of this one-shot, simultaneous-move game depends upon the choices made by both competitors. In this payoff matrix, the first number in each cell is the profit payoff to Microsoft; the second number is the profit payoff to Google.