As the Disney and Warner brothers are the examples of Oligopolistic industry so they must use game theory. As given in matrix below: DisneyWarner BrothersStar WarsPirates of the CaribbeanThe Matrix$100$300$80$200Superman$500$50$800$300 Either of the company can one action movie or the other. Each value in dollars shows profits for respective movie version.a. With this perfect information which movie will respective company make?

$ values represent profit Warner Brothers Disney Star Wars Pirates of the Caribbean…

Answered: As the Disney and Warner brothers are…

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter10: Monopolistic Competition And Oligopoly

Section: Chapter Questions

Problem 4SCQ: Sometimes oligopolies in the same industry are very different in size. Suppose we have a duopoly...

See similar textbooks

Related questions

Question

As the Disney and Warner brothers are the examples of Oligopolistic industry so they must use game theory. As given in matrix below:

	Disney
Warner Brothers	Star Wars	Pirates of the Caribbean
The Matrix	$100	$300	$80	$200
Superman	$500	$50	$800	$300

Either of the company can one action movie or the other. Each value in dollars shows profits for respective movie version.

a. With this perfect information which movie will respective company make?

Definition Definition Economic decision-making framework that analyzes how different players optimize their outcomes with given pay-offs corresponding to their available strategies. The assumptions of game theory are: The number of players or competitors are finite/limited; All participants are rational The rules of the game are known to every player; and Each participant has a finite set of actions. A common way in which game theory is presented as an ( m x n ) matrix in which m represents the strategies of row player and n represents the strategies of column player. There are several limitations of game theory: Many businesses have a large number of competitors, and selecting an optimal strategy in these circumstances is difficult; Real-life business operating environments are full of uncertainty and difficult to model as a game theory; and The assumption of rationality and utility maximization isn't always an accurate portrayal of human nature.

Expert Solution

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions