For the situation, identify the two players and their possible choices, and cons

Question

For the situation, identify the two players and their possible choices, and construct a payoff matrix for their conflict. In an attempt to gain more viewers, Channel 86 and Channel 7 are each trying to decide whether to schedule a quiz show or a reality series in their 8:00 prime time slot. Market research indicates that if Channel 86 chooses a quiz show, it will gain 3% of the market if Channel 7 runs a quiz show and lose 4% if Channel 7 runs a reality series, while if Channel 86 chooses a reality series, it will gain 11% if Channel 7 runs a quiz show and lose 11% if Channel 7 runs a reality series.

Explanation / Answer

Here player 1 is channel 86 and player 2 is channel 7.

The payoff matrix is a matrix having entries according to the payoff that the players get depending on their choices.

(Player 2)

Channel 7

Q R   

(Player 1) Q +3% -4%

Channel 86 R +11% -11%

Here +ve value represents gain and -ve value represents loss.

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