Question
Assume you are in the market for a luxury car. You encounter your salesperson Brian, who is excited to see you and help you make
Assume you are in the market for a luxury car. You encounter your salesperson "Brian", who is
excited to see you and help you make this important purchase. You have not decided on a new
or used car at this point. Brian recommends a used car that is currently available on the lot at
his dealership. You also saw a comparable model on Cars.com that was brand new at another
dealership that is an hour away. As you are sitting at Brian's desk, he offers you a nice cold
beverage and a snack. Although you have indicated that you may also like to go see the other
car, Brian recommends running your credit to see how low of an interest rate he can get you.
This seems to take some time, and at this point 2 hours has gone by. After running your credit,
Brian further recommends that you speak with the finance manager about additional
accessories and after-market options available. Now 4 hours has gone by and you
communicate that although everything sounds really good about the car, you are concerned
about the condition of buying a used car. Brian then offers to discount the extended warranty
on the car by 25% in order to earn your business. It is now 30 minutes before 6:00pm, the time
in which all dealerships close within a 2hr drive
Question: In an appendix, please create a diagram with a 2x2 matrix to explain possible scenarios
and payoffs using the scenario above. Is there a Nash Equilibrium possible in your
scenario? If so explain, If not explain
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