1. Southwest & Jet Blue compete on the Atlanta-Miami route, and currently charge $200 per ticket....

 

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1. Southwest & Jet Blue compete on the Atlanta-Miami route, and currently charge $200 per ticket. Southwest retains you to advise on its pricing strategy. You construct the following matrix: Profits Payoff Jet Blue's Fares $180 Southwest's Fares $200 $180 $160 35 40 45 $200 16 27 25 8 14 15 $160 a. What advice do you give Southwest re: pricing based on having no access to Jet Blue's profits? [Please state any assumptions made.] b You now choose to assume that Jet Blue's profit outcomes will be similar to those of Southwest. Complete the matrix above, and then identify any Cournot-Nash equilibrium(s) that might exist under this assumption. c. Suppose Southwest is the first mover under the conditions of b) above. Does being the first mover give Southwest an advantage in this game? Explain your answer. 1. Southwest & Jet Blue compete on the Atlanta-Miami route, and currently charge $200 per ticket. Southwest retains you to advise on its pricing strategy. You construct the following matrix: Profits Payoff Jet Blue's Fares $180 Southwest's Fares $200 $180 $160 35 40 45 $200 16 27 25 8 14 15 $160 a. What advice do you give Southwest re: pricing based on having no access to Jet Blue's profits? [Please state any assumptions made.] b You now choose to assume that Jet Blue's profit outcomes will be similar to those of Southwest. Complete the matrix above, and then identify any Cournot-Nash equilibrium(s) that might exist under this assumption. c. Suppose Southwest is the first mover under the conditions of b) above. Does being the first mover give Southwest an advantage in this game? Explain your answer.