Consumers drive bulk of BlackBerry growth Rosearch in Motion (RiM) added 38 mill

Question

Consumers drive bulk of BlackBerry growth Rosearch in Motion (RiM) added 38 million new BlackBerry subscribers in the last quarter and increased ts profit by 33 percent. Consumers made up 80 percent of the new subscribers as RIM introduced new features and lowered prices.But compelition increased as Apple introduced as new iPhone and lowered the price of its older model. RIM said it isn't worried about the competition. fright squares No R&D; $100m Souroe: Wal Stroet Journal, June 19, 2009 The payof matrix shows the game that Apple and RiM play R&D; > The rumbers in the table are millions of dollars. $190m RIM What is the equilibrium of the game? The equlibrium of the game is that neither RIM nor Apple undertake research and development A. B. The equilibrium of the game is that Apple undertakes research and development and RIM does No R&D; OC. The oqu!brium ofthe game istat RIM undertakes research and deebpment and Apple does D. The oquitrum ofthe game is that Apple and RN both unde tale merh and de kopeert O E. This game has no equilibrium. Click to select your answer 20 6 3 4 2

Explanation / Answer

The payoffs look unclear but the Nash equilibrium of this game appears to be (R&D,R&D) with payoffs of (80,100). The correct answer is D.

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