Two magazines, MacLean's and Time, are competing for readers Through market research, they have learned that 70 of magazine readers are interested in Meghan and Harry, and the other 30 are interested in the Kardashians Each magazine has the option of putting one or the other on the cover of their magazine If they each choose the same person, they split the readership The table below illustrates the payoff matrix for these two magazines MacLean's Decision Meghan and Harry cover The Kardashians cover Time's Decision Meghan and Harry cover Time readership 35 MacLean's readership 35 Time readership 70 MacLean's readership 30 The Kardashians cover Time readership 30 MacLean's readership 70 Time readership 15 MacLean's readership 15 a) What is the cooperative outcome in this game (1 mark) b) What is MacLean's best decision Does it depend on Time's decision (1 mark) c) What is Time's best decision Does it depend on MacLean's decision (1 mark) d) What is the non cooperative outcome in this game (1 mark) e) What is the Nash equilibrium in this game Explain how you arrived at this conclusion (3 marks)

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Question: Two magazines, MacLean's and Time, are competing for readers. Through market research, they have learned that 70% of magazine readers are interested in Meghan and

Two magazines, MacLean's and Time, are competing for readers. Through market research, they have learned that 70% of magazine readers are interested in Meghan and Harry, and the other 30% are interested in the Kardashians. Each magazine has the option of putting one or the other on the cover of their magazine. If they each choose the same person, they split the readership.

The table below illustrates the payoff matrix for these two magazines.

	MacLean's Decision
Meghan and Harry cover	The Kardashians cover
Time's Decision	Meghan and Harry cover	Time readership: 35% MacLean's readership: 35%	Time readership: 70% MacLean's readership: 30%
The Kardashians cover	Time readership: 30% MacLean's readership: 70%	Time readership: 15% MacLean's readership: 15%

a) What is the cooperative outcome in this game? (1 mark)

b) What is MacLean's best decision? Does it depend on Time's decision? (1 mark)

c) What is Time's best decision? Does it depend on MacLean's decision? (1 mark)

d) What is the non-cooperative outcome in this game? (1 mark)

e) What is the Nash equilibrium in this game? Explain how you arrived at this conclusion. (3 marks)

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