Q1 (67 marks) There are two television stations in a city, each affiliated with one of the two major networks. The two stations, A and B, have the option of running the evening news program at either 6 pm (a \"live feed\"), at 7 pm (a \"taped delayed broadcast\"). In addition network B can also retransmit the broadcast at 9 pm. Each station's objective is to maximize the share of the viewing audience, as their advertising revenue as based on their market share in each hour. The share of evening news viewers captured by each station is given in the following table. Payoff Table (s A , SB) 6 Netw70rk B 9 Network A n 30%, 70% 62%, 38% 43%, 57% 55%. 45% 59%,41% 35%,650/0 14 (a) Derive and separately state the best response functions for each Network and identify which network, if any, has a dominant strategy. Justify and explain your answers. 6 (b) Does either network have a dominated strategy? Explain your answer. 2 (c) Explain whether there is a dominant strategy (or dominant solvable) equilibrium. 3 (d) Find the Nash equilibria of the game. Justify your answer. 42 (e) Assume that NA broadcasts at 6 pm and at 7 pm and that network B broadcasts at 6 pm or 9 pm. Let NA broadcast at 6 pm with probability p and that NB broadcasts at 6 pm with probability (1. 12 i) Construct the 2x2 payoff table. What are the expected payoffs to N1 and N2 as a function of p and q? 16 ii) The slope of Ni's payoff function depends on the probability with which Nj choses its strategy. Graph the payoff functions of both networks as functions of the probability of the other player. Clearly label everything in your graphs, (including intercepts). (Hint: there should be four payoff graphs here.) 14 iii) Derive and explicitly state the best response function of P1 and P2 then graph these best response functions. Clearly LABEL everything in the diagram. Determine the mixed strategy Nash equilibrium