Question
Given the above information, how to create a payoff matrix? If restaurant 1 decides to release their burrito, what will restaurant 2 decide to do?
Given the above information, how to create a payoff matrix?
If restaurant 1 decides to release their burrito, what will restaurant 2 decide to do?
And if they decide not to release their burrito, what will restaurant 2 decide to do?
Suppose restaurant 1 and restaurant 2 make this decision each year around the holidays. Restaurant 1 is a little more innovation and likes releasing limited time products; they tend to release a holiday menu item 75% of the time. Restaurant on the other hand, is more conservative and only release holiday menu items 40% of the times. Using this addition information and the profit calculated the payoff table,
What is the expected profit for each firm under each decision?
Profit of releasing holiday menu items by restaurant 1
Profit of releasing holiday menu items by restaurant 2
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