Operating in the telecommunication industry

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Firm 1 and Firm 2 are operating in the telecommunication industry.

Each can choose to go for the high end quality product (HIGH END QUALITY) or the low end quality product (LOW END QUALITY). Profits are given by the payoff matrix below:

If the managers of both firms are conservative and suppose both firms try to maximize profits, but Firm A has a head start in planning, and can commit first. Now what will the outcome be? What will the outcome be if Firm B has a head start in planning and can commit first?

Reference no: EM132519158

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