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Game theory: marketing

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The Tampa Tribune and the St. Petersburg Times compete for readers in the Tampa Bay market for newspapers. Recently, both newspapers considered changing the prices they charge for their Sunday editions. Suppose they considered the following payoff table for making a simultaneous decision to charge either a low price of $0.50 or a high price of $1.00. Please see attachment for questions.

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Using game theory to predict marking strategy for newspapers

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1.) Low price, because no matter what Tampa Tribune does, it is better off having a low price.

2.) No dominant strategy, because it is better off having a high price if the St. Petersburg Times has a high price, but having a low price if St. Petersburg Times has a low price.

3.) A strategy is dominated if, regardless of what any other players do, the strategy yields a smaller payoff than any other strategy. So St. Petersburg Times' dominated ...

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