Question: Location, Location, Location Not all location problems have similar solutions. Here is another one: For this example, we have two department stores: Gacey's and
Location, Location, Location Not all location problems have similar solutions. Here is another one: For this example, we have two department stores: Gacey's and Mimbel's. Each of the two stores has to choose a location for its one store in Gotham City. Each store will choose one of four location strategies: Uptown, Center City, East Side or West Side. The payoffs are shown in Table 4.E1. Table 4.E1 Payoffs in a New Location Game Mimbel's Uptown Center City East Side West Side Uptown 30,40 Gacy's Center City 50,95 East West Side Side 55,95 55,120 115,40 100,100 130,85 120,95 125,45 95,65 60,40 115,120 105,50 75,75 95,95 35,55 a. Does this game have Nash equilibria? What strategies, if so? b. Apply IEIS to determine the rationalizable strategies in this game. c. What would you say about the importance of congestion in the location decisions of the firm in this case?
Step by Step Solution
3.30 Rating (162 Votes )
There are 3 Steps involved in it
only Ne payoff 100 100 Am Iterated elimination of strictly dominated a... View full answer
Get step-by-step solutions from verified subject matter experts
