Stations advertising revenue

Assignment Help Business Economics

Reference no: EM135670

Q. There are three major network affiliate television stations in Hicksville: RBC, CBC and MBC. All three stations have the option of airing the evening network-news program live at 6:00 pm or in a delayed broadcast at 7:00 pm. By regulation, they may not choose other times. Each station's objective is to maximize its viewing audience, in order to maximize the station's advertising revenue. The table below gives the percentage of Hicksville's total population "captured" by each station as a function of the time at which each news program is shown. The numbers do not sum to 100 since not everyone always watches TV.

Times Chosen Audience Capture
MBC RBC CBC MBC RBC CBC
6:00 pm 6:00 pm 6:00 pm 32 14 24
6:00 pm 6:00 pm 7:00 pm 27 8 30
6:00 pm 7:00 pm 6:00 pm 24 30 16
6:00 pm 7:00 pm 7:00 pm 50 13 12
7:00 pm 6:00 pm 6:00 pm 30 16 24
7:00 pm 6:00 pm 7:00 pm 24 30 16
7:00 pm 7:00 pm 6:00 pm 14 30 23
7:00 pm 7:00 pm 7:00 pm 32 14 24

1) Suppose that the choices of all three stations are made simultaneously. Find the Nash equilibrium(s). (Hint: Try to set this up so it looks more like a normal form game. To do this for three players, use two 2*2 matrices: let MBC choose the matrix, RBC the row and CBC the column).

2) Suppose now that the game is played sequentially. MBC moves first. RBC moves second and CBC moves third. Each station can observe all previous moves before making her choice. Explain what will happen.

3) Look at your answers to questions (1) and (2). Give an intuition why there is, or is not, a difference in the outcome.

Reference no: EM135670

Questions Cloud

A farmer has a production function : A farmer has a production function f(L) where the input is capital (L). The cost of this loan is L(1+i). The farmer also has an outside option (loan from family member) which generates a profit of A.

Fear the boom and bust : Watch the video titled Fear the Boom and Bust. Using the tools of macroeconomics, identify the primary difference between the two philosophies.

Ggps spes to enter bankruptcy protection : Describe whether you agree or disagree with the court's decision to allow GGP's SPEs to enter bankruptcy protection.

Purpose a cost of quality : Purpose a cost of quality and how do you think management could react to the relative size of the four categories of quality costs.

Stations advertising revenue : Each station's objective is to maximize its viewing audience, in order to maximize the station advertising revenue.

Comparative financial statement analysis and ratio analysis : Comparative financial statement analysis and ratio Analysis and trend analysis should involve Sales, Operating Expenses, Cost of Goods Sold, and Net Income

Sketch the extensive form of the game : Sketch the extensive form of the game, carefully labelling the players that move and the actions they have available

Evaluate the amount of the controllable overhead variance : Evaluate the amount of the controllable overhead variance and the overhead applied.

How classical economists explained this business cycle : A business cycle fact is that real wages are pro-cyclical. Using the classical labour market as we have all semester, show and explain how the classical economists explained this business cycle fact.

User Account

All Pages