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Game Theory - dominant strategy for each firm

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1. The two leading U.S. manufacturers of high performance radial tires must set their advertising strategies for the coming year. Each firm has two strategies available: maintain current advertising or increase advertising by 15%. The strategies available to the two firms, G and B, are presented in the payoff matrix below.
Firm B
Increase Adv. Maintain Adv.
Firm G Increase Adv. 27, 27 50, 12
Maintain Adv. 12, 50 45, 45

The entries in the individual cells are profits measured in millions of dollars. Firm G's outcome is listed before the
comma, and Firm B's outcome is listed after the comma.
Is there a dominant strategy for each firm? (Answer: Yes or No) What is it?

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1. The two leading U.S. manufacturers of high performance radial tires must set their advertising strategies for the coming year. Each firm has two strategies available: maintain current advertising or increase advertising by 15%. The strategies available to the two firms, G and B, are presented in the payoff matrix ...

Solution Summary

This post shows how to identify the dominant strategy for a firm in a game theory context, it there is one.

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Scenario DD Consider the game below:
What kind of game is shown in Scenario DD?
Dominant Paradox.
Dominant game
Prisoner's Dilemma
Cournot's Duopoly Game
It is not possible to tell what kind of game it is because the strategies have not been identified.

Nash game

**(The numbers should be in a box, with Player B across the top & Strategy B1 & Strategy B2 underneath)
Player B
Strategy Strategy
B1 B2
PlayerA: Strategy A1 600,600 100,1000
Strategy A2 1000,100 200,200

**(Player A should be to the left of the box with Strategy A1, followed by Strategy two just underneath).

3.
Scenario DD Consider the game below:
What kind of game is shown in Scenario DD?
Dominant Paradox.
Dominant game
Prisoner's Dilemma
Cournot's Duopoly Game
It is not possible to tell what kind of game it is because the strategies have not been identified.

Nash game

**(The numbers should be in a box, with Player B across the top & Strategy B1 & Strategy B2 underneath)
Player B
Strategy Strategy
B1 B2
PlayerA: Strategy A1 600,600 100,1000
Strategy A2 1000,100 200,200

**(Player A should be to the left of the box with Strategy A1, followed by Strategy two just underneath).

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