Question
Market research has determined the following changes in market shares based on the different combinations of music choices for the two clubs: if both clubs
Market research has determined the following changes in market shares based on the different combinations of music choices for the two clubs: if both clubs play country, the new club (Club 1) does very well with a 24% increase in market share. If Club 1 plays country and the competing club (Club 2) plays rock, Club 2 gets a 12% increase in market share. If these choices are reversed, Club 2 does even better and gets an 18% increase in the market share. Lastly, if both clubs play rock, Club 1 does better and gets a 6% increase in market share. This results in the following payoff matrix:
|
| Club 2 | ||
| Club 1 |
| Country | Rock |
| Country | (24, -24) | (-12, 12) | |
| Rock | (-18, 18) | (6, -6) | |
- Use the payoff matrix to determine the optimum strategy for Club 1. Show all of your work. (Hint: Mixed Strategy Algorithm)
I am totally stuck on this question. I am not quite sure how to calculate the optimum strategy using the Mixed Strategy Algorithm. Your help is greatly appreciated.
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International Accounting
Authors: Frederick D. S. Choi, Gary K. Meek
7th Edition
0136111475, 9780136111474
