Suppose that there are only two vehicle dealerships (A and B) in a small city. Each dealership isconsidering three strategies that are designed to take sales of new vehicles from the other dealership

over a period of four months. The strategies, assumed to be the same for both dealerships, are:

Strategy 1: Offer a cash rebate on a new vehicle.

Strategy 2: Offer free optional equipment on a new vehicle.

Strategy 3: Offer a 0% loan on a new vehicle. The payoff table (in number of new vehicle sales gained per week by Dealership A (or lost by Dealership

cash rebate a1 3,2,1

free options 4,3,5

0% loans a3 -1,2,3

B) is shown below

DEALERSHIP B DEALERSHIP A Cash Rebate, bi Free Options, bz 0% Loans, by Cash Rebate, as 3 2 Free Options, az 3 S 0% Loans, as -1 2 w