In the given problem, the strategies are investigated to steal business from others. The effects of the strategies are summarized in a payoff matrix.
There are two rivals, Joey and Tony, Joey represents the rows, and the Tony represents columns. Tony picks up any one option and Joey picks up an option from
.
The payoff matrix is as follows:
![]()
Consider the Payoff matrix . Let the rows and columns have a mixed strategy, specified by the vector respectively. The sum of the vectors must equal one. The Row’s strategy is fixed; for the optimal column, move either Gourmet g , with payoff or Seating s with payoff or Free soda f with payoff
.
Consider that Joey announces x before Tony. Pick that maximizes from . LP (Linear Programming) to pick is
.
Joey needs to choose and to maximize the z as follows,
![]()
Simplifying yields the following:
![]()
Pickthat maximizes from
.
LP (Linear Programming) to pick is
.
Tony needs to choose and to minimize the w as follows,
![]()
Simplifying yields the following:
.
The LPs of Tony and Joey are not equal. Reduce the payoff matrix as follows,
![]()
Delete the dominant row or column to reduce the payoff matrix. Column 2
has column three dominance; delete column 2 .
The optimal strategy for Joey![]()
The optimal strategy for Joey =![]()
The optimal strategy for Joey![]()
The optimal strategy for Tony![]()
The optimal strategy for Tony![]()
The optimal strategy for Tony![]()
Therefore, the optimal strategies for Tony areand for Joey is
.