2)Consider the following game from baseball.

Pitcher \ Hitter

Expect Fastball

Expect Curveball

Throw Fastball

0.60, 0.40

0.80, 0.20

Throw Curveball

0.75, 0.25

0.55, 0.45

a)Assume both players make their decision at the same time. What is the Nash equilibrium of this game? How often is the hitter successful?

b)Now assume that the pitcher makes their decision first, and then the hitter makes their decision (they know what pitch the pitcher will throw). Draw this as a game tree. What is the Nash equilibrium? How often is the hitter successful?

3)Choose a sports team. (Any team you want is fine.) Try to find/estimate their team revenues in each of the following categories (note the assumptions in your estimates):

Team:

a.Ticket sales

b.Broadcasting rights

c.Licensing income

d.Venue-related revenue

e.Revenue sharing

4)Demand for tickets is given by Q = 200,000 - 100P.

a.The team has a very large stadium, and no costs (MC = 0). How many tickets will a profit-maximizing firm sell? At what price?

b.The team earns an additional $20 profit per attendee in concessions/sponsorship/merchandise. How does this affect attendance/ticket price?

c.The situation is just like (b), but the team's stadium seats 20,000 people. What is

attendance and the ticket price?

5)Consider the team from question (3). For each of the following examples of price discrimination, does the team use this form of price discrimination? If so, explain, and if not, why not?

a.Perfect price discrimination

b.Indirect price discrimination

c.Bundling/Mixed bundling

d.Block pricing

e.Two-part tariffs