In this Decision Point activity, you began to explore game theory: specifically, how your outcomes are dependent not just on your own choices, but also on the reactions of competitors. Use what you learned from this decision point, and information from the chapter to answer the following question. Suppose Nike and Adidas are considering whether to develop new advertising campaigns. For each pair of strategies, the blue triangle shows Nike's payoff and the yellow triangle shows Adidas's payoff, in billions. Use this information to complete the sentences. Adidas's choices Advertise Do not advertise Advertise $6b Nike's choices -$3b $6b $14b Do not advertise $14b $10b -$3b $10b The best outcome for Nike is to choose not to advertise and for Adidas to choose to advertise If Adidas chooses not to advertise, their best result will happen if Nike chooses to advertise The Nash equilibrium for this advertising game is for Nike to choose to advertise and for Adidas to advertise Answer Bank

In this Decision Point activity, you began to explore game theory: specifically, how your outcomes are dependent not just on your own choices, but also on the reactions of competitors. Use what you learned from this decision point, and information from the chapter to answer the following question. Suppose Nike and Adidas are considering whether to develop new advertising campaigns. For each pair of strategies, the blue triangle shows Nike's payoff and the yellow triangle shows Adidas's payoff, in billions. Use this information to complete the sentences. Adidas's choices Advertise Do not advertise Advertise $6b Nike's choices -$3b $6b $14b Do not advertise $14b $10b -$3b $10b The best outcome for Nike is to choose not to advertise and for Adidas to choose to advertise If Adidas chooses not to advertise, their best result will happen if Nike chooses to advertise The Nash equilibrium for this advertising game is for Nike to choose to advertise and for Adidas to advertise Answer Bank

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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