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American Airlines (AA) and Delta are engaging into the following one-shot game:
American Airlines (AA) and Delta are engaging into the following one-shot game: if AAadvertises for a fair to Chicago and Delta does not, AA will make $20 million in profits andDelta will make $6 million. If Delta advertises and AA does not, AA will make $2 million andDelta will make $6 million. If AA advertises and Delta advertises, each firm earns $10 million. Ifneither firm advertises, Delta will make $8 million and AA will make $4 million.(a) Write the payoff matrix for the above game.(b) Does AA have a dominant strategy?(c) Does Delta have a dominant strategy?(d) What is the Nash equilibrium for the one-shot game?
