Solution-First round of strategy elimination

First round of strategy elimination

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Reference no: EM133124949

The following is a payoff matrix showing profit in millions of dollars when two companies simultaneously decide on various advertising budgets ($1 million, $2 million, or $3 million):

			Pizza Hut
		$1 mill	$2 mill	$3 mill
	$1 mill	$90 / $130	75 / 135	75 / 140
Papa Johns	$2 mill	70 / 115	70 / 1102	60 / 125
	$3 mill	75 / 100	80 / 95	65 / 90

a. In the first round of strategy elimination (when all three possible budgets are under consideration), which ad budget would the companies exclude?

b. After the first round of elimination (previous question), would either company make a second-round elimination?

c. What would be the likely outcome of this simultaneous advertising decision (i.e. what ad budget would each company end up choosing)?

Reference no: EM133124949

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First round of strategy elimination

Reference no: EM133124949

Reference no: EM133124949

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