User Account

All Pages

What is the equilibrium for this advertising strategy game

Assignment Help Microeconomics
Reference no: EM13153370

The Super Bowl, the championship game in U.S. professional football, delivers the largest television audience of the year and as such is an important, but expensive, advertising opportunity for producers of consumer products. Beer brands Miller and Budweiser recognize the benefits of advertising during the Super Bowl but both must decide how much they will spend on Super Bowl advertising. An investment analyst prepared the following payoff matrix:

783_What is the equilibrium for this advertising strategy game.png

The numbers in the table are the additional profit that the brewing companies will earn if their budget for Super Bowl advertising is either "low" (a small number of commercials during the Super Bowl), "medium" or "high" (a large number of commercials during Super Bowl). The highlighted figures are the additional profits for Miller, and the non-bolded figures are the additional profits for Budweiser. All of the figures are expressed in millions of dollars. For example, the first cell indicates that if both Budweiser and Miller choose a low advertising budget for the Super Bowl, Miller will earn an additional $60 million of profit and Budweiser will earn an additional $45 million of profit.

Recall that a "dominant strategy" is a strategy that always provides the best outcome, independent of the choice of strategy by the other player.

(a) Does Miller have a dominant strategy? Why or why not?

(b) Does Budweiser have a dominant strategy? Why or why not?

(c) What is the equilibrium for this advertising strategy game? That is, in which cell will the firms end up?

Reference no: EM13153370

Questions Cloud

What is the probablity that two individals : what is the probabilty that a woman heterozygous for an X-linked trait will have a son with a genetic disorder if the genetic disorder is recessive? Dominant?
What amout of bonds will it issue : What will be the government deficit. If the government finances the deficit by issuing bonds, what amout of bonds will it issue?
Fundamental impact of not using a project management : Determine the fundamental impact of not using a project management tool which clearly displays the effect of delays in delivering work packages, as required per your project schedule. Justify your response.
What must the rating of the bonds be for them to sell at par : c. What must the rating of the bonds be for them to sell at par?d. Suppose that when the bonds are issued, the price of each bond is $959.54. What is the likely rating of the bonds? Are they junk bonds?
What is the equilibrium for this advertising strategy game : Does Budweiser have a dominant strategy and what is the equilibrium for this advertising strategy game? That is, in which cell will the firms end up?
What is the properties of both memory b and t cells : We know that in order for vaccines to be beneficial to us, the vaccine antigens must be able to acitvate our immune system in order to generate our memory cells. What is the properties of both memory B and T cells which make them more effective in..
Amount of interest expenses and discount amortization : construct a bond amortization table for this problem to indicate the amount of interest expenses and discount amortization at each May 31. Include only the first four years.
Does study give evidence that serotonin levels are different : What is your opinion: Does this study provide evidence that the postmortem serotonin levels are different between patients who die of heart disease and patients who die of other causes?
Entries to reflect the transactions : Under the expenses warranty treatment give the entries to reflect the above transactions (accrual method) for 2008 and 2009.

Reviews

Write a Review

Microeconomics Questions & Answers

  The free rider problem

Question: Explain why the free rider problem makes it difficult for perfectly competitive markets to provide the Pareto efficient level of a public good.

  Failure of the super committee is good thing for economy

Some commentators have argued that the failure of the “Super committee” is good thing for the economy?  Do you agree?

  Case study analysis about optimum resource allocation

Case study analysis about optimum resource allocation: -  Why might you suspect (even without evidence) that the economy might not be able to produce all the schools and clinics the Ministers want? What constraints are there on an economy's productio..

  Fixed cost and vairiable cost

Questions:  :   Which of the following are likely to be fixed costs and which variable costs for a chocolate factory over the course of a month?  Explain your choice.

  Problem - total cost, average cost, marginal cost

Problem - Total Cost, Average Cost, Marginal Cost: -  Complete the following table of costs for a firm.  (Note: enter the figures in the  MC   column  between  outputs of  0 and 1, 1 and 2, 2 and 3, etc.)

  Oligopoly and demand curve problem

Problem based on Oligopoly and demand curve,  Draw and explain the demand curve facing each firm, and given this demand curve, does this mean that firms in the jeans industry do or do not compete against one another?

  Impact of external costs on resource allocation

Explain the impact of external costs and external benefits on resource allocation;  Why are public goods not produced in sufficient quantities by private markets?  Which of the following are examples of public goods (or services)? Delete the incorrec..

  Shifts in demand and movements along the demand curve

Describe the differences between shifts in demand and movements along the demand curve. What are the main factors which can shift the demand curve? Explain why they cause the demand curve to shift. Use examples and draw graphs to support your discuss..

  Article review question

Article Review Question: Read the following excerpts from the article "Fruit, veg costs surge' by Todd, Dagwell, published in the Herald on January 25th 2011 and answer questions below:

  Long-term growth, international trade & globalization

Long-term Growth, International Trade & Globalization:- This question deals with concepts such as long-term growth, international trade and globalization. Questions related to trade deficit, trade surplus, gains from trade, an international trade sce..

  European monetary union (emu) in crisis

"Does the economic bailout of Spain and Greece spell the beginning of the end for the European Monetary Union (EMU)?"

  Development game “settlers of catan”

Read the rules of the game, the overview and the almanac for the Development Game "Settlers of Catan"

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd