Exam 13: Game Theory and Competitive Strategy

Scenario 13.17 Consider the entry-deterrence game below. The potential entrant would have to spend some amount in sunk costs to enter the market. -Refer to Scenario 13.17. If the Incumbent Monopoly installed excess capacity in advance of the Potential Entrant's appearance on the scene, and this excess capacity had a cost of $X, it would reduce by $X the Incumbent Monopoly's payoffs in the

Scenario 13.17 Consider the entry-deterrence game below. The potential entrant would have to spend some amount in sunk costs to enter the market. -In the game in Scenario 13.17, Incumbent Monopoly has

Your firm needs a private investigator and the best private eye in Santa Teresa is Kinsey Milhone. Her services are worth $30,000 to your firm but you do not want to pay her more than $10,000. You tell Kinsey that you cannot pay her more than $10,000 unless you get prior approval from the Board of Directors of your company, and, unfortunately, they just met and won't meet again for 6 months. This strategic move on your part gives you ________ flexibility and ________ bargaining power.

What is true about threats in the game in Scenario 13.15?

Scenario 13.16 Consider the pricing game below: -Refer to Scenario 13.16. If Gooi can move first, and Ici threatens to buy yogurt machines, no matter what Gooi does,

Scenario 13.10 Consider the game below: -What is true about dominant strategies in the game in Scenario 13.10?

An auction in which a seller begins by offering an item for sale at a relatively high price and then reduces the price by fixed amounts until receiving a bid is known as a:

Scenario 13.9 Consider the following game: Two firms are situated next to a lake, and it costs each firm $1,500 per period to use filters that avoid polluting the lake. However, each firm must use the lake's water in production, so it is also costly to have a polluted lake. The cost to each firm of dealing with water from a polluted lake is $1,000 times the number of polluting firms. -What is true about dominant strategies in the game in Scenario 13.9?

Two firms in a local market compete in the manufacture of cyberwidgets. Each firm must decide if they will offer a warranty or not. The pay-offs of each firm's strategy is a function of their competitor as well. The pay-off matrix is presented below. If firm #1 announces it will offer a warranty regardless of what firm #2 does, is this a credible threat? Why or why not?

Scenario 13.2: Consider the following game: -In the game in Scenario 13.2, the equilibrium strategies