In the following one-shot game, if you advertise
In the following one-shot game, if you advertise and your rival does not, you will make $20 million in profits and your rival will make $6 million. If your rival advertises and you do not, you will make $2 million and your rival will make $6 million. If you advertise and your rival advertises, you will each earn $10 million. If neither of you advertise, your rival will make $8 million and you will make $4 million. (a) Write the above game in normal form.(b) Do you have a dominant strategy?(c) Does your rival have a dominant strategy?(d) What is the Nash equilibrium for the one-shot game?(e) How much would you be willing to bribe your rival not to advertise?
and your rival does not, you will make $20 million in profits and your rival will make $6 million. If your rival advertises and you do not, you will make $2 million and your rival will make $6 million. If you advertise and your rival advertises, you will each earn $10 million. If neither of you advertise, your rival will make $8 million and you will make $4 million. (a) Write the above game in normal form.(b) Do you have a dominant strategy?(c) Does your rival have a dominant strategy?(d) What is the Nash equilibrium for the one-shot game?(e) How much would you be willing to bribe your rival not to advertise?
