Time Magazine and Newsweek are two competing news magazines. Suppose that ech company charges the...
Time Magazine and Newsweek are two competing
news magazines. Suppose that ech company charges the same $5.00
price for their magazines. Each wants to maximize its sales given
the $5.00 price. Each week, there are two potential cover stories.
One is on politics. The other is on the economy. Sales of both
companies are affected by the decisions on which story to place on
their covers. The two magazines make this decision independently
and at the same time. The resulting sales for the two companies are
given in the following table:
| Time Cover | Newsweek Cover | Time sales | Newsweek sales |
| politics | politics | 400 | 150 |
| economy | economy | 200 | 150 |
| politics | economy | 700 | 200 |
| economy | politics | 300 | 700 |
What is the Nash equilibrium in this game?
|
Time: politics, Newsweek: politics |
|
|
Time: politics, Newsweek: economy |
|
|
Time: economy, Newsweek: politics |
|
|
Time: economy, Newsweek: economy |
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