The pizza business in Little Town is split between two rivals, Tony and Joey. They are each investigating strategies to steal business away from the other. Joey is considering either lowering prices or cutting bigger slices. Tony is looking into starting up a line of gourmet pizzas, or offering outdoor seating, or giving free sodas at lunchtime. The effects of these various strategies are summarized in the following payoff matrix (entries are dozens of pizzas, Joey’s gain and Tony’s loss).
| Gourmet | TONY Seating
| Free soda |
Joey Lower price | +2 | 0 | −3 |
Bigger slices | −1 | −2 | +1 |
For instance, if Joey reduces prices and Tony goes with the gourmet option, then Tony will lose 2 dozen pizzas worth of business to Joey.
What is the value of this game, and what are the optimal strategies for Tony and Joey?
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