P-TV and QRS-TV are trying to decide whether to air a sitcom or a reality show in a given time slot. Viewers like both sitcoms and reality shows, but sitcoms are more expensive to produce than reality shows since real actors need to be hired. QRS-TV makes its decision first, and then P-TV observes that choice before making its decision. Both stations know all of the information in the decision tree below.
In the equilibrium of this game:
A. QRS-TV will air a reality show and P-TV will air a sitcom.
B. both stations will air sitcoms.
C. both stations will air reality shows.
D. QRS-TV will air a sitcom and P-TV will air a reality show.
Answer: C
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