Determine if the promise credible or not

Reference no: EM13199601

Two major networks are competing for viewer ratings in the 8:00-9:00 P.M. and 9:00-10:00 P.M. slots on a given weeknight. Each has two shows to fill this time period and is juggling its lineup. Each can choose to put its "bigger" show first or to place it second in the 9:00-10:00 P.M. slot. The combination of decisions leads to the following "ratings points" results:
Network 2
First Second
Network 1 First 20, 30 18, 18
Second 15, 15 30, 10

a. Find the Nash equilibria for this game, assuming that both networks make their decisions at the same time.

b. If each network is risk-averse and uses a maximin strategy, what will be the resulting equilibrium?

c. What will be the equilibrium if Network 1 makes its selection first? If Network 2 goes first?

d. Suppose the network managers meet to coordinate schedules and Network 1 promises to schedule its big show first. Is this promise credible? What would be the likely outcome?

Reference no: EM13199601

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