SigmaSoft and ThetaTech are the dominant makers of computer system software. The market has two components: a large mass-market component in which demand is price sensitive, and a smaller...

SigmaSoft and ThetaTech are the dominant makers of computer system software. The market has two components: a large mass-market component in which demand is price sensitive, and a smaller performance-oriented component in which demand is much less price sensitive. SigmaSoft’s product is considered to be technically superior. Each company can choose one of two strategies:

1. Open architecture (Open): Mass-market focus allowing other software vendors to develop products for its platform.

2. Proprietary (Prop): Allowing only its own software applications to run on its platform.

Depending on the strategy each company selects, their profits would be:

The Nash equilibrium for these companies is:

A. proprietary for SigmaSoft and proprietary for ThetaTech.

B. open architecture for SigmaSoft and proprietary for ThetaTech.

C. proprietary for SigmaSoft and open architecture for ThetaTech.