Question

The game below depicts revenues to the Brooklyn Nets & the New York Knicks based on the number of games they decide to broadcast locally. Assume they serve the same metropolitan area (market), and that each team pursues a strategy of best response. [KNICKS CKS 40 games 30 games $5 $10 mil mil games $105 mil. mil $ 10 mil. games

Answer 1

9. Correct option: One; both teams have

As one can see, Player 1 has dominant strategy in choosing 30 games

Player 2 has dominant strategy in choosing 30 games

Thus, nash will be: ($10 million; $15 million)

10. None of the above

Reason: Collusion would not be feasible in this game as every other outcome would make one or the other player worse off