QUESTION 1. The following is a payoff matrix showing profit in millions of dollars when two companies simultaneously decide on various advertising budgets ($1 million, $2 million, or $3 million):

			Pizza Hut
		$1 mill	$2 mill	$3 mill
	$1 mill	$90/ $130	75/ 135	75/ 140
Papa Johns	$2 mill	70/ 115	70/ 120	60/ 125
	$3 mill	75/ 100	80/ 95	65/ 90

a. In the first round of strategy elimination (when all three possible budgets are under consideration), which ad budget would the companies exclude?

b. After the first round of elimination (previous question), would either company make a second-round elimination?

c. What would be the likely outcome of this simultaneous advertising decision (i.e. what ad budget would each company end up choosing)?

QUESTION 2. On the way to my mother's house for Thanksgiving dinner, my wife was on her phone and noted that Old Navy was going to be open for Black Friday sales starting on Thursday at 3pm. Many people lament the fact that stores are open very early the day after Thanksgiving or, as it seems, even open on Thanksgiving day itself. The owners, managers, and employees of retail stores presumably would enjoy spending Thanksgiving with their families instead of preparing for Black Friday sales, yet almost every store announces that it will open very early on Friday morning for shoppers. How might game theory offer an explanation for this unexpected behavior?