The residential division of Prism's high-speed Internet service uses one advertising agency, while its commercial division uses another. Two analysts,Andy and Brad, are asked to test the effectiveness of the two agencies. Andy proposes an A/B test that compares the click-through rates per ad of thetwo agendles. Brad proposes a difference-In-difference test in which the budgets for both agencies are increased by 50%, and the percentage changesin the click-through rates are compared.True or False: Andy's proposal is more likely than Brad's to suffer from blas due to issues with "representativeness."TrueFalse2017-

Click-Through Rate Click-Through rate measures the ratio between the number of clicks on an…

The residential division of Prism's high-speed Internet service uses one advertising agency, while its commercial division uses another. Two analysts, Andy and Brad, are asked to test the effectiveness of the two agencies. Andy proposes an A/B test that compares the click-through rates per ad of the two agencies. Brad proposes a difference-In-difference test in which the budgets for both agencles are increased by 50%, and the percentage changes in the click-through rates are compared. True or False: Andy's proposal is more likely than Brad's to suffer from blas due to issues with "representativeness." O True False C

The residential division of Prism's high-speed Internet service uses one advertising agency, while its commercial division uses another. Two analysts, Andy and Brad, are asked to test the effectiveness of the two agencies. Andy proposes an A/B test that compares the click-through rates per ad of the two agencies. Brad proposes a difference-In-difference test in which the budgets for both agencles are increased by 50%, and the percentage changes in the click-through rates are compared. True or False: Andy's proposal is more likely than Brad's to suffer from blas due to issues with "representativeness." O True False C

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter17: Making Decisions With Uncertainty

Section: Chapter Questions

Problem 6MC

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The residential division of Prism’s high-speed Internet service uses one advertising agency, while its commercial division uses another. Two analysts, Andy and Brad, are asked to test and evaluate the effectiveness of the two agencies. Andy proposes an A/B test that compares the click-through rates per ad for the two agencies. Brad proposes a difference-in-dif-ference test in which the budgets for both agencies are increased by 50%, and the percent change in click-through rates is compared. What might be the sources of selection bias for the two proposals? Which is likely to be smaller?
Q-2. In order to fight for market share, two companies A and B each have the following strategies, company A has 4 strategies, namely Newspapers, Radio, TV and Social Media, while B has 3 strategies, namely Newspapers, Radio and TV. (percentage of market share.%) are as follows: Matriks Payoff: Asked: i A Koran Radio TV Sosmed B Koran Radio TV -2 1 2 3 -1 -2 -1 1 3 1 2 4 a. Does the game have a Saddle point? b. If not, determine Optimal strategy A and B
You are the manager of an organization in America that distributes blood to hospitals in all 50states and the District of Columbia. A recent report indicates that nearly 50 americans contractHIV each year through blood transfusions. Although every pint of blood donated in the unitedstates undergoes a battery of nine different test, existing screening methods can detect only theantibodies produced by the bodyâ€™s immune system-not foreign agents in the blood, newlyinfected HIV donors can pass along the virus through blood that has passed existing screeningtests. Happily, researchers have developed a series of new tests aimed at detecting and removinginfections from donated blood before it is used in transfusions. The obvious benefit of these testsis reduced incidence of infection through blood transfusions. The report indicates that the currentprice of decontaminated blood is $60 per pint. However, if the new screening methods areadopted, the demand and supply for…
1.4. Suppose you are against one of two alternatives but 90% of theelectorate disagrees with your position and favors that option. Is there avoting method that is anonymous, neutral, and monotone that preventsthat option from being selected as the winning alternative?
Exercise 6.1Suppose that two airlines decide to collude. Analyse the game between these two companies. Suppose that each of them can charge for tickets a high price or a low price. If one of them charges 100 euros, it gets few profits if the other also charges 100 euros and high profits if the other charges 200 euros. On the other hand, if the company charges 200 euros, it obtains very little profit if the other charges 100 euros and an average profit if the other also charges 200 euros. a) Represent the matrix of results of this game. b) What is the Nash equilibrium in this game? Explain your answer. c) Is there an outcome that would be better than the Nash equilibrium for the two airlines? How could it be achieved? Who would lose out if it were reached?
information refers to a market where one side (either the buyer or theseller, but usually the buyer) has less information than the other side of themarket. When there is asymmetric information in a market, markets are inefficientbecause the side with less information doesn't want to take the risk involved inbuying (or selling) the good or service.One method of solving this problem is through screening. Screening is a strategyone uses when they don't have information. A screen can be any indicator thatlets the screener know if the good or service is reliable and will meet thescreener's wants.Offer an example of when you used screening to solve a lack ofinformation. What kind of screen did you use?• Was the screen effective? Were you happy with the result?
Marta and Sara are two students that devote part of their free time to doing surveys for a market research company. The income obtained from this activity depends on the number of surveys they do, bearing in mind that the girls may freely choose the interviewees. As they both live in the same neighborhood in case, they just interview their neighbors (N), they compete for the same people and their monthly income is about 250 Euros. If they both choose to go to other neighborhoods of the city and interview strangers (S), they can carry out more surveys and both their incomes would be 400. If one of them decides to go and interview people in another neighborhood but the other one does not, the former will obtain income for 500, and the latter for 300, and vice versa. After receiving the order from the company, Marta is always the one who starts to work first. Sara has information about the places where Marta has done the surveys. Please: Represent this game extensively. Represent this…
A cool kid is willing to rename himself for a profit. He decides to auctionoff the naming right. Two bidders show interest. Their valuations for thenaming right are independently and uniformly distributed over [0;100]:There are several possible ideas to design the auction. The auction runs as follows. Both bidders are invited to the sameroom; an auctioneer will start the auction with an initial price 0 and increase it by $1 every minute. The bidders are not allowed to say anything during the process, but they can walk out of the room at any moment. If one bidder walks out of the room when the price increases to p(the bidder does not need to pay), the remaining bidder will be awarded the naming right for a price of p. If both walk out when the price reaches p, the naming right is not assigned and the two bidders do not need to pay. What should the bidders do? Explain your answer.
Marta and Sara are two students that devote part of their free time to doing surveys for a market research company. The income obtained from this activity depends on the number of surveys they do, bearing in mind that the girls may freely choose the interviewees. As they both live in the same neighborhood in case, they just interview their neighbors (N), they compete for the same people and their monthly income is about 250 Euros. If they both choose to go to other neighborhoods of the city and interview strangers (S), they can carry out more surveys and both their incomes would be 400. If one of them decides to go and interview people in another neighborhood but the other one does not, the former will obtain income for 500, and the latter for 300, and vice versa. After receiving the order from the company, Marta is always the one who starts to work first. Sara has information about the places where Marta has done the surveys. Please: Now imagine that none of the girls can know…
14.4. ADVERTISING AND BRAND SWITCHING. Empirical evidence suggests that the proba- bility of a household switching to a different brand of breakfast cereal is increasing in the advertising intensity of that brand. However, the effect of advertising is significantly lower for households who have previously tried that brand.21 What does this suggest about the nature of advertising expenditures (persuasion vs. information)?
Faris Co. and Fahad Co. are rivalry in Bahrain's market. Suppose the payoff to each of four strategic interactions are as follows: Faris Co. Response Action Reduce Price Don't Reduce Price Gain = BD 30,000 Reduce Price Loss = BD 1,000 Don't Reduce Price Loss = BD 5,000 No loss or gain The probability of Faris Co. to reduce price is 95 % (otherwise, probability of Faris Co. for not reducing price is 5 %), assume that Fahad Co. choose "reduce price" strategy a. What is size of loss from "reduce price" for Fahad Co.? b. What is size of gain from "don't reduce price" for Fahad Co? c. What is the expected payoff of a "reduce price" for Fahad Co.? and give an example (application) of d. Explain the concept of 'game theory' game theory Fahad Co. Response
Individual A Cooperate Defect Individual B Cooperate 28, 28 34,8 Defect 8, 34 12, 12 Suppose individuals live in villages that are homogeneous by type and a fractions of their interactions takes place in their village, the rest occurring in the city where the types were mixed. The fraction of the population who are cooperators is a. a) Write the expected return functions for cooperate and defect as a function of s and a. b) Under which conditions does an interior equilibrium exist for the fraction of the population playing cooperate (a) c) If the interior equilibrium for a exists, is the interior equilibrium unstable or stable? d) Find the impact of higher s on the interior equilibrium for a. What intuitively does this outcome mean? Discuss your answer.