Two property developers, Classical Land and Keynes Development, are contemplating launching their properties for sales around the months of June or July. If both launch their properties in June, both companies can earn $20 million. If both launch their properties in July, both companies can earn $10 million. If one company launches in June and the other company launches in July, the company that launches in June will earn $35 million and the company that launches in July will earn $15 million.

1. If both companies choose their launching date simultaneously, construct and describe a payoff matrix and solve for the Nash equilibrium.

(13 marks)

2. If Classical Land can decide on its launching date first, construct the decision tree model and determine the payoffs to Classical Land and Keynes Development.

(12 marks)

Answer rating: 100% (QA)

ANSWER Simultaneous DecisionMaking Lets construct the payoff matrix for the simultaneous decisionmaking scenario Each cell in the matrix represents th... View the full answer