AQR pizza wars

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Pizza Wars
By Javier Salgado , Javier Herrera , Ayman
Abusaif ,Victor Moran
What is the best strategy for Jill?
The best strategy Jill can follow is to do the opposite of what Jim does unless both
Jill and Jim give away pizza without pepperoni.
But the best option for Jill overall is to give away cheese pizza while Jim does the
same. This allows for the highest increase in sales for Jill all the while decreasing
her competitions sales. This leads to a $200 dollar increase in sales for Jill and
$200 decrease for Jim putting her ahead and Jim even further behind.
What is the best strategy for Jim?
The best strategy for Jim is to take advantage of when Jill gives away cheese
pizza without pepperoni so he can do the same.This allows him to be ahead in
sales while Jill is losing sales.
Considering that Jim’s pizza isn’t necessarily as good or as good value as Jill’s, he
should lay low and only give away pizza when Jill is giving away pepperoni and do
the same. Giving away pepperoni at the same time as Jill is the only option for Jim
to increase sales and use this strategy if he doesn’t want to possibly enhance his
appeal toward customers because in most situations Jill has the upper hand. This
allows for a $200 dollar difference than before considering the $100 increase for
Jim and $100 decrease for Jill.
Matrix solution
Week 1:
100
100
-100
100
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