SPRING 2022 scott . schaefer @eccles . utah . edu hotel, not on the overall profit of WHI. This means that each hotel's management seeks to take actions that maximize the profit of its hotel . The Will-Tel Manager, Mr. Jared, relies on billboard advertising to draw weary road warriors off the highway to his hotel. Mr. Jared is currently weighing whether to do a large or small billboard campaign this June . He estimates that his June average nightly occupancy will be 60 rooms if he does a small campaign, but that this number will be 80 if he instead does a large campaign . While this bump in occupancy is attractive to Mr . Jared , billboard advertising is expensive . The cost of a small campaign is only $10,000 , but the cost of a large campaign is $ 40,000 . The Inn Manager, Ms. Ivanka, instead relies on Instagram advertising to attract her upper- middle class clientele. Ms. Ivanka is currently weighing whether to do a large or small instagram campaign this June . She estimates that her June average nightly occupancy will be 40 rooms if she does a small campaign , but that this number will be 52 if she instead does a large campaign While this bump in occupancy is attractive to Ms. Ivanka, Instagram advertising is expensive. The cost of a small campaign is only $20,000 , but the cost of a large campaign is $50,000 . Interestingly, Will-Tell billboards are occasionally noticed by well-to-do auto travelers, who then stop in Willowdale but choose to stay at The Inn. Because of this effect , if Mr . Jared runs a large billboard campaign , then the June average nightly occupancy at the Inn is higher by 10% (compared to what it otherwise would be). Similarly, Instagram ads for the Inn at Willowdale are occasionally noticed by bargain-conscious travelers, who then visit the town but choose to stay at Will-Tel. Because of this effect, if Ms. Ivanka runs a large Instagram campaign, then the June average nightly occupancy at Will-Tel is higher by 15% (compared to what it otherwise would be ). (a) Draw a game box to represent this situation. (Recall there are 30 days in June , when computing monthly profit for each hotel.) (b) Does either player have a dominant strategy? (c) Identify any Nash Equilibria of this game. (d) Is the Nash Equilibrium a good outcome , in the sense of maximizing the overall profit of WHI ? (e) The CEO of WHI is surprised by your analysis. She explains "But I read in the Har - vard Business Review that I'm supposed to delegate decision -making and empower my people . Why isn't the delegate /empower plan leading to profit maximization ?" What's your answer? (Focus here on the externality associated with advertising. Is advertising associated with a positive or negative externality in this case ?) (f) What advice would you give the CEO for fixing the problem with advertising decisions