Can someone answer the following question?
The J. Whack Co. is considering a new product. The senior management has no idea whether or not the Nita Jackson Co. will come out with a competitive product. If J. Whack adds an assembly line for the product and Nita Jackson does not follow with a competitive product, their expected profit is $40,000; if they add an assembly line and Nita Jackson does follow, they still expect a $10,000 profit. If J. Whack adds a new plant addition and Nita Jackson does not produce a competitive product, they expect a profit of $600,000; if Nita Jackson does compete for this market, J. Whack expects a loss of $100,000.
Part 1:
Construct a Payoff table for this situation;
Part 2:
Calculate Hurwicz’s criterion of realism using α’s of a. 0.7, b. 0.3, and c. 0.1.
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