Google and Yahoo! Are Two Large Search Engine Companies

question 37

Essay

Google and Yahoo! are two large search engine companies.Combined,these companies control a large market share in the search engine industry.Both companies currently advertise their search engines on television,and each company earns a profit of $550 million.If both companies were to stop advertising on television,each would earn a profit of $600 million.If only one company were to stop advertising on television and the other company continued to do so,the company that stopped advertising would earn a profit of $200 million and the company that continued to advertise would earn a profit of $800 million.
Assume this is a simultaneous-move game where Google and Yahoo! choose to advertise or choose not to advertise,and Google and Yahoo! cannot collude.Explain the process of finding Google's dominant strategy.

---

Definitions:

Problem Solving

The process of finding solutions to difficult or complex issues through a systematic approach that involves creativity and reasoning.

Operant Conditioning

A method of teaching in which behavior is changed by the use of incentives or disciplinary actions.

Classical Conditioning

An instructional approach where repetitively linking two stimuli causes a reaction, at first prompted by the second stimulus, to be elicited by the first stimulus over time.

Imprinting

A form of learning occurring at a particular life stage that is rapid and apparently independent of the outcomes of behavior.