Consider a three-firm version of the patent-race model (9.2.1) studied in class.

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Consider a three-firm version of the patent-race model (9.2.1) studied in class. Suppose that each one of the three firms is capable of developing a product. Let V denote the dollar value of the patent associated with the new product. Each firm can construct a research lab which requires a fixed investment of I dollars. Assume that if a firm constructs a lab, it has a probability of ?=1?2 of discovering the product. If only one firm discovers the product, it will earn a profit of V. If only two firms discover, then each will earn V?2, and if all three discover, then each will earn V?3. (20 points) As in class, draw the

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