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Problem 2




There are three major network affiliate television stations in Hicksville: RBC, CBC and MBC. All three;stations have the option of airing the evening network-news program live at 6:00 pm or in a delayed;broadcast at 7:00 pm. By regulation, they may not choose other times. Each station?s objective is to;maximize its viewing audience, in order to maximize the station?s advertising revenue. The table below;gives the percentage of Hicksville?s total population ?captured? by each station as a function of the time;at which each news program is shown. The numbers do not sum to 100 since not everyone always;watches TV.;Times Chosen Audience Capture;MBC RBC CBC MBC RBC CBC;6:00 pm 6:00 pm 6:00 pm 32 14 24;6:00 pm 6:00 pm 7:00 pm 27 8 30;6:00 pm 7:00 pm 6:00 pm 24 30 16;6:00 pm 7:00 pm 7:00 pm 50 13 12;7:00 pm 6:00 pm 6:00 pm 30 16 24;7:00 pm 6:00 pm 7:00 pm 24 30 16;7:00 pm 7:00 pm 6:00 pm 14 30 23;7:00 pm 7:00 pm 7:00 pm 32 14 24;1) Suppose that the choices of all three stations are made simultaneously. Find the Nash;equilibrium(s). (Hint: Try to set this up so it looks more like a normal form game. To do this for;three players, use two 2*2 matrices: let MBC choose the matrix, RBC the row and CBC the;column).;2) Suppose now that the game is played sequentially. MBC moves first. RBC moves second and;CBC moves third. Each station can observe all previous moves before making her choice. Explain;what will happen.


Paper#31949 | Written in 18-Jul-2015

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