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  • Table 1: Payoff Summary: 1. Determine The Percentage of Time Nokia Should Introduce Camera or Video Feature

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    Nikky Bless Leonar
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    The document contains 4 tables that analyze the payoffs and strategies for Nokia and Sony Ericsson in introducing different mobile phone features. Table 1 shows the payoffs for each company for different features. Table 2 determines the minimum loss and maximum gain strategies. Table 3 calculates the expected values based on different introduction percentages. Table 4 shows the equilibrium condition is for Nokia to introduce Camera 33% of the time and Video 67% of the time, resulting in a $2,333 gain, while Sony Ericsson introduces Internet 47% of the time and Walkman 53% of the time, resulting in a $2,333 loss.

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    Accounting 3

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    PS_7

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    The document contains 4 tables that analyze the payoffs and strategies for Nokia and Sony Ericsson in introducing different mobile phone features. Table 1 shows the payoffs for each company for different features. Table 2 determines the minimum loss and maximum gain strategies. Table 3 calculates the expected values based on different introduction percentages. Table 4 shows the equilibrium condition is for Nokia to introduce Camera 33% of the time and Video 67% of the time, resulting in a $2,333 gain, while Sony Ericsson introduces Internet 47% of the time and Walkman 53% of the time, resulting in a $2,333 loss.

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    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
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    9 views4 pages

    Table 1: Payoff Summary: 1. Determine The Percentage of Time Nokia Should Introduce Camera or Video Feature

    Uploaded by

    Nikky Bless Leonar
    The document contains 4 tables that analyze the payoffs and strategies for Nokia and Sony Ericsson in introducing different mobile phone features. Table 1 shows the payoffs for each company for different features. Table 2 determines the minimum loss and maximum gain strategies. Table 3 calculates the expected values based on different introduction percentages. Table 4 shows the equilibrium condition is for Nokia to introduce Camera 33% of the time and Video 67% of the time, resulting in a $2,333 gain, while Sony Ericsson introduces Internet 47% of the time and Walkman 53% of the time, resulting in a $2,333 loss.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 4

    Table 1: Payoff Summary

    Feature Payoff Sony Ericsson


    ($000) Internet Walkman
    Camera -3 7
    Nokia Video 5 0

    Table 2: Strategy Domination


    Feature Payoff Sony Ericsson
    ($000) Internet Walkman Minimum Loss Strategy
    Camera -3 7 -3 Internet
    Nokia Video 5 0 0 Walkman
    Maximum gain 5 7 Dominated None
    Strategy Video Camera None Dominated

    Table 3: Expected Value


    Feature Payoff Sony Ericsson Expected
    ($000) Internet Walkman Loss
    Camera -3 7 -3P + 7(1-P)
    Nokia Video 5 0 5P + 0(1-P)
    Expected gain -3Q + 5(1-Q) 7Q + 0(1-Q)

    Setting up the equillibrium:


    1. Determine the percentage of time Nokia should introduce Camera or Video feature.
    -3Q + 5(1-Q) = 7Q + 0(1-Q)
    -3Q + 5 - 5Q = 7Q + 0
    -8Q + 5 = 7Q
    -8Q - 7Q = -5
    Q = 0.3333 or 33%percentage of time that Nokia should introduce Camera

    1-Q = 1 - 0.33
    = 0.6667 or 67%percentage of time that Nokia should introduce Video

    2. Determine the expected gain of Nokia.


    -3Q + 5(1-Q) = -3(0.3333) + 5(0.6667)
    = 2.333
    = $2,333 which is equivalent to gain of $2,333

    3. Determine the percentage of time that Sony Ericsson should introduce Internet or Walkman.
    -3P + 7(1-P) = 5P + 0(1-P)
    -3P + 7 - 7P = 5P + 0
    -10P + 7 = 5P
    -10P - 5P = -7
    P = 0.4667 or 47%percentage of time that Sony should introduce Internet

    1-P = 1 - 0.4667
    = 0.5333 or 53%percentage of time that Sony should introduce Walkman

    4. Determine the expected loss of Sony Ericsson.


    -3P + 7(1-P) = -3(0.4667) + 7(0.5333)
    = 2.333
    = $2,333 which is equivalent to loss of $2,333

    Table 4: Equilibrium Condition


    Sony Ericsson
    Feature Payoff Internet Walkman Expected
    ($000) 47% 53% Loss
    Camera 33% -3 7 2.33
    Nokia Video 67% 5 0 2.33
    Expected gain 2.33 2.33 Equilibrium

    In summary, Nokia should introduce Camera feature 33% of the time and Video feature 67% of the time for an
    expected gain of $2,333. Meanwhile, Sony Ericsson ahould introduce Internet feature 47% of the time and the
    Walkman feature 53% of the time for an expected loss of $2,333.
    ntroduce Camera

    ntroduce Video
    troduce Internet

    troduce Walkman

    % of the time for an


    f the time and the

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