Q Game Theory- Applications in the Real World In the video above, we came to understand why competitors in a monopolistic environment will make decisions based on what their competition is doing. Watch the video on Game Theory and the Tobacco Industry and respond to the question below. The payout matrix used in the Tobacco Industry video is below. Company A Company B Don't Invest in Advertising Invest in Advertising Don't Invest in Advertising $50m ; $50m $25m ; $60m Invest in Advertising $60m ; 25m $40m ; $40m Explanation LInkLinks to an external site. • D.2.2.2 Advanced Explanations-Game Theory #1 • D.2.2.3 Advanced Explanation- Game Theory #2- Dominant Strategy- Nash Equilibrium • QuickWrite Instructions: Students should review the graphs, the Advanced Explanation link, and review the two videos on monopolistic competition. QuickWrite Question: 1. Given your knowledge of Game Theory what selection would each company make without the ban on Advertising by the government and why? -What is the Dominant Strategy for each? 2. Why does the government ban on cigarette advertising "allow" each firm to increase their profits? 3. Assume that firms can change their decision when the obtain information of the decision may by their opponent. • Company A chooses to Advertise and Company B chooses to Not Advertise • According to the Nash Equilibrium will a firm change its decsion? • If so, name the firm and the change to be made. Why did they change? 4. Why does the government ban on Advertising benefit both firms? Would the firms support such a ban? Explain. Need Help? D.1.2.3 Advanced Explanation- Monopolistic Competition Assignment Requirements: This is not an analytical paper, but a summary analysis of your knowledge of the concepts in this chapter. Students ARE NOT to cut and paste from the internet. You are welcome to add cited sources to your response. The response should be about 300 words (one page). Students posting less than a 300 word response will get reduced or no credit. Students may want to construct this response on a Google Doc and then post or submit the item to this portal. These responses are run against public sources via Turnitin.com (running inside Canvas) Submitting an Assignment via Google.Doc. - You can also just paste the text into the box