indicates that the resulting profits to each firm for the alternative strategies are given by the following payoff matrix Firm B H H 50,40 60,45 FirmA L 55,55 15,20 a If both firms make their decisions at the same time and follow maximin (low-risk)strategies,what willthe outcome be? With a maximin strategy,a firm determines the worst outcome for each option,ther chooses the option that maximizes the payoff among the worst outcomes.If Firm A chooses H,the worst payoff would occur if Firm Bchooses H:A's payoff would be 50. If Firm A chooses L.the worst pavoff would occur if Firm B chooses L:A's pavoff would be 15.With a maximin strategy.A therefore chooses H.If Firm B cho payoff would occur ifFirm AchoosesL:the payoff would be 20.If Firr B chooses H the worst payoff,40.would oecur if Firm A chooses H.With a maximin strategy.B therefore chooses H.So under maximin,both A and B produce a high-quality system. 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 e outcome be if Firm B has a head start in planning and I can commit first? If Firm A can commit first,it will choose H because it knows that Firm B will rationally choose L.since L gives a higher payoff to B(45 vs.40).This gives Firm A a payoff of 60.If Firm A instead committed to L B would choose H (55 vs.20) giving A 55 instead of 60.If Firm B can commit first,it will choose H because it s that Firm A will rationally chooseL since L gives a higher payoff to A(55 vs 50 This gives Firm Ba payoffof 55 Getting a head start costs money (you have to gear up a large engineering team).Now consider the two-stage game in which first,each firm decides how much money to spend to speed up its planning.and second,it announces which product (H or L)it will produce.Which firm will spend mor speed planning?How will it nd?Should the other firm spend anything to speed up its planning?Explain In this game.there is an apparent advantage to being the first mover.If A move first,its profit is 60.If it moves second,its profit is 55,a difference of 5.Thus,it would be willing to spend up to 5 for the option of announcing first.On the otherindicates that the resulting profits to each firm for the alternative strategies are given by the following payoff matrix: Firm B H L H 50, 40 60, 45 Firm A L 55, 55 15, 20 a. If both firms make their decisions at the same time and follow maximin (low-risk) strategies, what will the outcome be? With a maximin strategy, a firm determines the worst outcome for each option, then chooses the option that maximizes the payoff among the worst outcomes. If Firm A chooses H, the worst payoff would occur if Firm B chooses H: A’s payoff would be 50. If Firm A chooses L, the worst payoff would occur if Firm B chooses L: A’s payoff would be 15. With a maximin strategy, A therefore chooses H. If Firm B chooses L, the worst payoff would occur if Firm A chooses L: the payoff would be 20. If Firm B chooses H, the worst payoff, 40, would occur if Firm A chooses H. With a maximin strategy, B therefore chooses H. So under maximin, both A and B produce a high-quality system. b. 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? If Firm A can commit first, it will choose H, because it knows that Firm B will rationally choose L, since L gives a higher payoff to B (45 vs. 40). This gives Firm A a payoff of 60. If Firm A instead committed to L, B would choose H (55 vs. 20), giving A 55 instead of 60. If Firm B can commit first, it will choose H, because it knows that Firm A will rationally choose L, since L gives a higher payoff to A (55 vs. 50). This gives Firm B a payoff of 55. c. Getting a head start costs money (you have to gear up a large engineering team). Now consider the two-stage game in which first, each firm decides how much money to spend to speed up its planning, and second, it announces which product (H or L) it will produce. Which firm will spend more to speed up its planning? How much will it spend? Should the other firm spend anything to speed up its planning? Explain. In this game, there is an apparent advantage to being the first mover. If A moves first, its profit is 60. If it moves second, its profit is 55, a difference of 5. Thus, it would be willing to spend up to 5 for the option of announcing first. On the other