Suppose that the University of Alabama and Clemson are making spending decisions for theupcoming year. Assume that Alabama is currently spending $15 million on their recruiting andfacilities, and Clemson is spending $10 million. Each team has an additional $5 million to spendor keep as profits. If they both choose to not spend the additional $5 million then Alabama hasa 60% chance of getting the highest quality quarterback recruit to commit to them (getting thecommitment of the player is the goal). However, if they both choose to spend the additional $5million then there is a 57% chance that Alabama gets the high quality quarterback to commit. IfAlabama spends the additional $5 million but Clemson doesn’t then there is a 67% chanceAlabama gets the recruit. However, if Alabama does NOT spend the additional $5million butClemson does then there is a 50% change either team gets the recruit’s commitment. Setup thepayoff matrix and label the players, their strategies, and their payoffs, and identify theequilibrium(s) of this “game”.
Suppose that the University of Alabama and Clemson are making spending decisions for the
upcoming year. Assume that Alabama is currently spending $15 million on their recruiting and
facilities, and Clemson is spending $10 million. Each team has an additional $5 million to spend
or keep as profits. If they both choose to not spend the additional $5 million then Alabama has
a 60% chance of getting the highest quality quarterback recruit to commit to them (getting the
commitment of the player is the goal). However, if they both choose to spend the additional $5
million then there is a 57% chance that Alabama gets the high quality quarterback to commit. If
Alabama spends the additional $5 million but Clemson doesn’t then there is a 67% chance
Alabama gets the recruit. However, if Alabama does NOT spend the additional $5million but
Clemson does then there is a 50% change either team gets the recruit’s commitment. Setup the
payoff matrix and label the players, their strategies, and their payoffs, and identify the
equilibrium(s) of this “game”.
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