The Wall Street Journal (John Lippman, "The Producers: ‘The Terminator is Back’, March 8, 2002, A1) reported that Warner Bros. agreed to pay $50 million for its U.S. distribution rights, plus an additional $50 million in marketing costs so that it could release Terminator 3 (T-3) in the summer of 2003. It paid this large sum because it did not want anyone else to release T-3 on the same weekend in 2003 that Warner Bros. released its movie Matrix 2. Suppose that Warner Bros. had not purchased the distribution rights to T-3 and that the film’s producer retained the rights. Warner Bros. decides whether to release Matrix 2 on the July 4 weekend or on the July 18 weekend. Simultaneously, T-3’s producer decides which of those two weekends to release its film. The payoff matrix (in millions of dollars) of the simultaneous-moves game is:
T-3 ProducerWarner Bros.
July 4
July 18
July 4
50, 50
80, 35
July 18
30, 90
20, 20
What is the Nash equilibrium to this simultaneous moves game?
