Club de Cuervos is Netflix’s first original Spanish-language television show. The Mexican series follows two siblings, Isabel and Chava, fighting over the direction of a professional soccer team after the sudden passing of their dad, who was the owner of the team. The action takes place in the fictional city of Nuevo Toledo.
Concepts: Uncertainty, investment in physical capital
Background: Uncertainty is an important but complex concept that potentially severely affects economic outcomes. In the context of Club de Cuervos, the passing of Salvador Iglesias Sr. created uncertainty about the future of the local soccer team, and rumors of the club being relocated had emerged.
Question: Explain why and how the uncertainty created by the passing of Salvador Iglesias Sr. affects the club itself, but also the local economy of Nuevo Toledo.
Concepts: Game theory, dominant strategy, Nash equilibrium
Background: The penultimate game of the season is critical for the Cuervos to qualify for the playoffs. The Cuervos must win this game, and their rival, Tijuana, which is playing the same day, must also win its game for the Cuervos to qualify. Based on the description made in the series, if the Cuervos make a significant effort, they will win their game. The same is true for Tijuana. We can consider winning or losing their games as strategies for both Tijuana and Cuervos. Tijuana will be advantaged if the Cuervos is not qualified as it is a good team. Also, Tijuana would be guaranteed to play an easier contestant in the first round of the playoff if they lose that game.
Question: Determine whether both teams have dominant strategies and predict the result of Tijuana's and the Cuervos' games using the following payoff matrix that represents this situation.
Concept: Vertical supply, shifts in the demand curve
Background: The season's penultimate game was critical for the Cuervos qualification to the playoffs. Unfortunately, after that game, the Cuervos were eliminated. However, the Cuervos still had to play the last game of the season.
Question 1: Think about the Cuervos' stadium and ticket sales. Let's consider that the capacity of the Nuevo Toledo stadium is 30,000 spectators. Draw the supply curve of one Cuervos game's tickets.
Question 2: Explain how the demand for tickets changes between the two games. Draw a supply and demand diagram representing this change.