What is the situation of first-mover advantage

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The demand for most new films peaks in the first few days after opening, then tapers off. Two key factors that affect potential demand are the season (Summer and Christmas are the best times) and the timing of other releases. Suppose that both Studio Luna and Moonlight Movies are producing major action movies. The two studios must choose between release on December 11 or 18. If both films open on December 11, each will sell 200,000 tickets. If one opens on December 11 and the other on December 18, then the early release will sell 350,000 tickets, while the later release will sell 150,000. If both open on December 18, each will sell 100,000 ticketsa.

a. Suppose that the studios choose their launch dates simultaneously. Construct a game in normal form (payoff matrix) to illustrate the sitution and identify the equilibrium or equilibria.

b. As a simultaneous game, is this an example of a prisoners' dilemma game? Why or why not?

c. Is this a situation of first-mover advantage? Explain your answer with a suitable game in extensive form

Reference no: EM13205140

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