Dennis is the International Representative of ABS-CBN and he is planning to partner with a foreign TV network, either BBC or Al-Jazeera. He also learned that ABS- CBN’s closest competitor, GMA 7, is planning to partner with a foreign TV network either CNN or Fox News. If ABS-CBN partners with BBC, it will lose $7,000

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter15A: Auction Design And Information Economics

Section: Chapter Questions

Problem 10E

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Question

Dennis is the International Representative of ABS-CBN and he is planning to partner with a foreign TV network, either BBC or Al-Jazeera. He also learned that ABS- CBN’s closest competitor, GMA 7, is planning to partner with a foreign TV network either CNN or Fox News. If ABS-CBN partners with BBC, it will lose $7,000 if GMA partners with CNN or gain $9000 if GMA 7 partners with Fox News. If ABS-CBN partners with Al-Jazeera, it will gain $2,000 if GMA 7 partners with CNN or lose $4,000 if GMA 7 partners with Fox News. What should be Dennis’ strategy? How much gain or loss for ABS-CBN will he expect? What should be the strategy of GMA 7?

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