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m 2 (30%) Pizza King and Noble Greek are two competing restaurants. Each must determine simultaneously the price they will charge for each pizza sold.

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m 2 (30%) Pizza King and Noble Greek are two competing restaurants. Each must determine simultaneously the price they will charge for each pizza sold. Pizza King believes that Noble Greek's price is a random variable X having the following probability distribution: P(X $6) 0.25, P(X- $8) 0.50, P(x $10) 0.25. If Pizza King charges a price P1 and Noble Greek charges a price p2, Pizza King would be able sell 100+25(P2-Pi) pizzas. It costs Pizza King $4 to make a pizza. Pizza King is considering charging $5, $6, $7, $8, or $9 for a pizza. (a) (10%) Use the maximin criterion to determine the optimal price that Pizza King should charge, and the corresponding optimal payoff should charge, and the corresponding optimal payoff what is the maximum amount that Pizza King should spend on this? (b) (10%) Use the expected value criterion to determine the optimal price that Pizza King (c) (10%) If Pizza King could bribe a Noble Greek's employee to learn Noble Greek's plans

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