Suppose Two Firms Are Trying to Decide How Much to Budget

Multiple Choice

Suppose two firms are trying to decide how much to budget for research and development. Once a new discovery is made, each firm benefits regardless of which firm developed the innovation. In this R&D game of chicken, the Nash equilibrium will be that

A) either both firms conduct the R&D or neither firm conducts the R&D.
B) only one firm conducts the R&D but which firm conducts the R&D cannot be determined.
C) both firms conduct the R&D.
D) neither firm conducts the R&D.