Question
Two competing companies are about to make a decision regarding an investment in a new promotional campaign. Company A considers two alternative strategies: A1: Advertise
Two competing companies are about to make a decision regarding an investment in a new promotional campaign. Company A considers two alternative strategies: A1: Advertise in all media A2: Advertise in newspapers only Company B considers two alternative strategies: B1: Run sweepstakes B2: Run a big sale If company A advertises in all media and B runs sweepstakes, then company A will increase its market share by 5%. If company A advertises in all media and B runs a big sale, then company A will decrease its market share by 2%. If company A advertises in newspapers only and B runs sweepstakes, then company A will decrease its market share by 3%. If company A advertises in newspapers only and B runs a big sale, then company A will increase its market share by 2%.
Arrange an appropriate payoff table for the problem. B1 B2 A1 A2
Is this a pure strategy or mixed strategy game?
What is the best strategy for company A?
What is the best strategy for company B?
What is the value of the game?
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