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Steve, MBA
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2 Time and Newsweek are two competing news magazines. Suppose

Customer Question

2 Time and Newsweek are two competing news magazines. Suppose that each 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 in on politics, and the other is on the economy. Sales of both companies are affected by the decision on which story to place on the covers. The two magazines make their 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 ($000’s) Newsweek Sales ($000’s)
Politics Politics 400 150
Politics Economy 700 200
Economy Politics 200 150
Economy Economy 300 700

a. Construct a payoff matrix of this game.

b. What is the Nash equilibrium in this game?

c. Does either or both of the magazines have a dominant strategy?

d. Suppose that both magazines are owned by the same publishing company that maximizes the combined profits of the magazines. Will the company make the same choice as in the non-cooperative game (i.e., owned by different publishing companies)?
Submitted: 7 years ago.
Category: Homework
Expert:  Steve replied 7 years ago.
Also due thurs?
Customer: replied 7 years ago.
Expert:  Marty28 replied 7 years ago.

a. graphic


b. The Nash Equilibrium is Politics(Time) Economy(Newsweek)

c.Both magazines have a dominant strategy Time-Politics Newsweek-Economy

d. No, the publishing company will choose make a different decision and choose to run an Economy story on both covers (Newsweek and Time) to maximize sales.


Customer: replied 7 years ago.
I directed this question to stephen . Sorry for the miscommunication
Expert:  Steve replied 7 years ago.

You need to spend $3 to view this post. Add Funds to your account and buy credits.
Steve, MBA
Category: Homework
Satisfied Customers: 24120
Experience: MBA
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Expert:  Steve replied 7 years ago.

Thanks for the accept. Are you still online? I am about to post your other answer.