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    Nash equilibrium / game theory

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    11. In a one-shot game, if you advertise and your rival advertises, you will each earn $5 million in profits. If neither of you advertise, your rival will make $4 million and you will make $2 million. If you advertise and your rival does not, you will make $10 million and your rival will make $3 million. If your rival advertises and you do not, you will make $1 million and your rival will make $3 million.
    a. Write the above game in normal form.
    Strategy Advertise Don't Advertise
    Advertise 5, 5 10, 3
    Don't Advertise 1, 3 2, 4

    b. Do you have a dominant strategy?
    Dominant strategy is not to advertise

    c. Does your rival have a dominant strategy?
    Dominant strategy is not to advertise

    d. What is the Nash equilibrium for the one-shot game?
    For A it's don't advertise; for B it's advertise

    e. How much would you be willing to bribe your rival not to advertise?
    Don't know this answer!

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    https://brainmass.com/economics/game-theory/nash-equilibrium-game-theory-321630

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    a. Your dominant strategy is Advertise because regardless of your opponent's move, you will always do better with advertise, if your opponent chooses Don't, you get 10 from Ad and 2 from Don't, if your opponent ...

    Solution Summary

    Nash equilibrium and game theory is examined.

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