MERT HEPSAYAR'S HW2.docx - MERT HEPSAYAR 2076412 HW2 1 There are three TV stations in a city each affiliated with one of the three major networks ABC

MERT HEPSAYAR'S HW2.docx - MERT HEPSAYAR 2076412 HW2 1...

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MERT HEPSAYAR 2076412 HW2 1) There are three TV stations in a city, each affiliated with one of the three major networks, ABC, CBS, and NBC. All three stations have the option of running the evening network news program at either 6:30 p.m. or 7:00 p.m. The share of evening news viewers captured by each station depending on the timing of the three stations is given in the tables below (Payoffs are in order of NBC, CBS, ABC): ABC News 6:30 p.m. CBS News NBC News 6:30 p.m. 7:00 p.m. 6:30 p.m. 24%, 34%, 42% 23%, 40%, 37% 7:00 p.m. 40%, 26%, 34% 18%, 22%, 60% ABC News 7:00 p.m. CBS News NBC News 6:30 p.m. 7:00 p.m. 6:30 p.m. 26%, 34%, 40% 40%, 26%, 34% 7:00 p.m. 16%, 60%, 24% 24%, 34%, 42% Find Nash equilibria. Explain how you found them. Nash equilibria: (7.00 p.m., 6.30 p.m., 6.30 p.m.) Explanation: At first, choosing 6.30 p.m. is strictly dominant strategy for ABC News. Second, choosing 7.00 p.m. is best response for NBC news. Third, choosing 6.30 p.m. is best response for CBS news. Therefore, the Nash equilibria is (7.00 p.m., 6.30 p.m., 6.30 p.m.).

• Spring '16
• Devrim Yavuz

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