In a One-Shot Game,if You Advertise and Your Rival Advertises,you

question 76

Essay

In a one-shot game,if you advertise and your rival advertises,you will each earn $5 million in profits.If neither of you advertises,your rival will make $4 million and you will make $2 million.If you advertise and your rival does not,you will make $10 million and your rival will make $3 million.If your rival advertises and you do not,you will make $1 million and your rival will make $3 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?

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Definitions:

Original Purchase

The initial acquisition of an asset or item, often referring to the first time it was bought or the condition in which it was first obtained.

Stockholders' Equity

Stockholders' equity represents the residual interest in the assets of a corporation, after deducting its liabilities. It is also known as shareholders' equity.

Liabilities

Liabilities represent obligations or debts that a company owes to external parties, which must be settled through the transfer of assets or services.

Assets

Economic resources owned by a business or individual, expected to bring future benefits.