Question

Need help confirming my answers

The following is a payoff matrix showing profit in millions of dollars when two companies simultaneously decide on various advertising budgets ($1 million, $2 million, or $3 million):

			Pizza Hut
		$1 mill	$2 mill	$3 mill
	$1 mill	$575 / $430	515 / 440	490 / 425
Papa Johns	$2 mill	625 / 405	550 / 410	500 / 400
	$3 mill	600 / 390	525 / 380	510 / 375

1.    In the first round of strategy elimination (when all three possible budgets are under consideration), which ad budget would the companies exclude?
2.    After the first round of elimination (previous question), would either company make a second-round elimination?
3.    What would be the likely outcome of this simultaneous advertising decision (i.e. what ad budget would each company end up choosing)?

Answer 1

Papa Som's Pizza hat Lure elea 3 mlaor $1 million (elemm) Papa Soln's ie elemena 2a ure alimhet 1 mlls Pizza het c) a Nash 2-