Two Companies Are About to Make a Decision Regarding an Investment

question 45

Short Answer

Two companies are about to make a decision regarding an investment in a new promotional campaign. Company A will either advertise in all media or advertise in newspapers only. Company B will either run a sweepstake or run a big sale. The payoff matrix is shown below. $\begin{array} { l l c c } \hline && { \text { Company B } } \\&& \mathrm { B } _ { 1 } : \text { Run a } & \mathrm { B } _ { 2 } : \text { Run a } \\&& \text { sweepstakes } & \text { big sale } \\\hline & \begin{array} { l } \text { A1: Advertise } \\\text { in all media }\end{array} & 4 &-1 \\\text { Company A } & \begin{array} { l } \text { A2: Advertise } \\\text { in newspapers only }\end{array} & - 2 & 1 \\\hline\end{array}$
Determine the value of the game.

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Definitions:

Local Unions

Regional or community-based branches of a larger labor union, representing workers' interests within a specific area.

Public-sector Unions

Labor organizations that represent workers employed by governmental bodies, advocating for their rights, wages, and work conditions.

Legal Right

A legal right is an entitlement that is protected by law, giving the holder the ability to perform or refrain from certain actions.

Collective Bargaining

The process of negotiation between employers and a group of employees aimed at reaching agreements that regulate working conditions.