Gym X and Bodyworks Are Both Going to Open an Exercise

question 55

Essay

Gym X and Bodyworks are both going to open an exercise facility in the local market.Each company may decide to open a facility concentrating on cardio equipment for customers interested in mostly aerobic workouts.Another alternative for each company is to open a facility concentrating on muscle building equipment for customers interested mostly in bodybuilding workouts.The pay-off matrix for each company dependent upon their strategies and that of their competitor is given below. Does either player have a dominant strategy? Does the game have any Nash equilibria? What is the maximin strategy of each player in the game?

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Definitions:

Accountability

The requirement to show performance results to a supervisor.

Obligation

A duty or commitment that an individual or organization is bound to fulfill, often due to legal, moral, or social reasons.

Centralized

A system or organization structure where decision-making authority is concentrated at a single point, usually at the top hierarchical level.

Vertically Integrated

A strategy where a company expands its business operations into different steps on the same production path, such as when a manufacturer also controls the distribution and retail levels of their product.