9. Consider the following game between Sony, a manufacturer of video cassette players, and
Columbia Pictures, a movie studio. Each firm must decide whether to use the VHS or Bata
format – Sony to make video players, Columbia to release its movies for rental or purchase.
Sony
Columbia Pictures
Beta VHS
Beta 20, 10 0, 0
VHS 0, 0 10, 20
a) Restrict attention to pure strategies. Does either firm have a dominant strategy? What is (are)
the Nash equilibrium (equilibria) of this game?
b) Restrict attention again to pure strategies, but now focus on a sequential-move game in
which Sony chooses its strategy first. What is (are) the Nash equilibrium (equilibria) of this
game?