Each has two shows to fill this time period and is juggling its lineup. Each can

Question

Each has two shows to fill this time period and is juggling its lineup. Each can choose to put its “bigger” show in the early slot, or place it in the late slot. The combination of decisions leads to the following “ratings points” results:

a)Are there any dominant strategies in this game, and if so use your answer to determine the outcome of this game.

b)Find the Nash equilibrium (or equilibria if more than one) for this game, assuming that both networks make their decisions at the same time.

c)What will be the equilibrium if CBS can makes its selection first? If NBC goes first?

Explanation / Answer

a. Yes there is dominant strategy in this game. The dominant strategy for this game is both players put their big shows in early slot, this is because at that point both players have highest ratings. So the dominant strategy for this game is (19 , 19).

b. The nash equilibrium for this game is both players to slot their big shows in early slot. This is because, though they have higher ratings point in the late slot but there is an incentive for both players to slot their show in the early slot if its competitor did not slot in early.

So nash equilibrium is also to slot big shows in the early slot i.e., (19 , 19).

c. The equilibrium for this game would be (28 , 11) if CBS selects first. This is because at that point CBS have highest ratings.

And if NBC chooses first then the equilibrium will be at (21 , 29).

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