Question 1

​In the simultaneous move labor negotiation game:

Accepted Answer

A) ​Neither party prefers bargaining hard in the Nash equilibrium 
B) Both the parties want to end up in the least efficient outcome 
C) Both parties bargain hard in the Nash equilibrium 
D) ​Both parties want to stay in the prisoner's dilemma 
A) ​Neither party prefers bargaining hard in the Nash equilibrium 
B) Both the parties want to end up in the least efficient outcome 
C) Both parties bargain hard in the Nash equilibrium 
D) ​Both parties want to stay in the prisoner's dilemma C

Question 2

​If,during the negotiations between the union and the management a strike occurs,it would be because

Accepted Answer

A) ​The union is trying to convince the management that it will stick to its strategy 
B) The management doesn't believe the union's threat 
C) All of the above 
D) ​None of the above 
A) ​The union is trying to convince the management that it will stick to its strategy 
B) The management doesn't believe the union's threat 
C) All of the above 
D) ​None of the above C

Question 3

​A company that rewards its salespeople based on the number of sales made can expect

Accepted Answer

A) ​Higher sales prices 
B) Lower sales prices 
C) No sales 
D) ​All of the above 
A) ​Higher sales prices 
B) Lower sales prices 
C) No sales 
D) ​All of the above B

Question 4

​For the following question
Consider a simultaneous move game between a union and a company.If both the parties bargain hard,each would gain nothing.If only one party bargains hard the accommodating party gets a profit of $1 million while the bargaining party gets a $5 million,while if they both accommodate,they each get $3 million.
-​If the Union threatens a strike,what is the firm's best response?

Accepted Answer

A) ​Bargain hard 
B) Accommodate 
C) Run 
D) ​Hide 
A) ​Bargain hard 
B) Accommodate 
C) Run 
D) ​Hide

Question 5

​Under the non-strategic view of bargaining,the terms of agreement are determined by

Accepted Answer

A) ​The rules of the game 
B) The alternatives to agreement 
C) The precise form of negotiations 
D) ​All of the above 
A) ​The rules of the game 
B) The alternatives to agreement 
C) The precise form of negotiations 
D) ​All of the above

Question 6

​Use the following setup for question
Consider a non-strategic game between a firm and its union.The value to the firm of getting the workers back to work is $5 million.The union's agreement value to get back to work is $5 million.The firm can hire nonunion workers,"scabs",so their disagreement value is 1 million and the union members can find temporary employment elsewhere,making the unions disagreement value $2million.
-​The union would have a better bargaining position in the negotiations if

Accepted Answer

A) ​The firm can hire individual workers at a lower wage 
B) The union has low wage workers who cannot afford to be off work 
C) The union has a strike fund to pay workers during work stoppage actions 
D) ​The firm can easily replace workers with machinery 
A) ​The firm can hire individual workers at a lower wage 
B) The union has low wage workers who cannot afford to be off work 
C) The union has a strike fund to pay workers during work stoppage actions 
D) ​The firm can easily replace workers with machinery

Question 7

​Armpit Homunculus
Prescott Pharmaceuticals is facing class action suit over side effects caused by its latest growth supplement.The lawyers representing the class are asking $200 million because they claim Prescott knew about and hid the fact that the supplement caused Armpit Homunculus.Prescott claims it had no foreknowledge of this and can take their chance at trial where they expect a $50 million payment.Just before the trial date,an internal Prescott email is discovered in which Dr.Colbert,D.F.A.is joking about "how hideous the armpits will be on all these giants." How does this affect the likely cost of settling the case?

Accepted Answer

The disagreement value for Pre

Question 8

​To improve your own bargaining position

Accepted Answer

A) ​decrease the value of your outside options 
B) increase the value of your outside options 
C) do not alter the value of your outside options 
D) ​increase the value of your opponent's outside options 
A) ​decrease the value of your outside options 
B) increase the value of your outside options 
C) do not alter the value of your outside options 
D) ​increase the value of your opponent's outside options

Question 9

​When buying a car from a commission salesman you improve your bargaining position by

Accepted Answer

A) ​shopping when the new model year cars have just arrived 
B) shopping when the showroom is full of customers 
C) shopping when the car lot has many cars left unsold 
D) ​shopping toward the beginning of the month 
A) ​shopping when the new model year cars have just arrived 
B) shopping when the showroom is full of customers 
C) shopping when the car lot has many cars left unsold 
D) ​shopping toward the beginning of the month

Question 10

use the following setup
Consider a sequential game between a shopkeeper and a haggling customer.The party who moves first chooses either a high price ($50)or low price ($20)and the second mover either agrees to the price or walks away from the deal and neither party gets anything.Ignore costs and assume the customer values the item at $60.
-​Would the customer be able to convince the shopkeeper that he would walk out if he receives a high price?

Accepted Answer

A) ​Yes,because walking out is most profitable move for the customer 
B) No,because walking out is an unprofitable strategy for the customer 
C) No,because walking out is not a credible threat 
D) ​Both B&C 
A) ​Yes,because walking out is most profitable move for the customer 
B) No,because walking out is an unprofitable strategy for the customer 
C) No,because walking out is not a credible threat 
D) ​Both B&C

Question 11

​Jill,a bookkeeper,just received an attractive offer from an outside firm and so she asks for a raise from her current employer.She would be in a strong bargaining position because

Accepted Answer

A) ​Her value for disagreement has increased 
B) Her value for disagreement has decreased 
C) Her value for disagreement has not changed 
D) ​Her value for agreement has not changed 
A) ​Her value for disagreement has increased 
B) Her value for disagreement has decreased 
C) Her value for disagreement has not changed 
D) ​Her value for agreement has not changed

Question 12

​John Nash,the mathematician responsible for the Nash equilibrium,also proved that any reasonable bargaining outcome would

Accepted Answer

A) ​Split the gains from trade 
B) Allocate the gains from trade to the seller 
C) Allocate the gains from trade to the buyer 
D) ​All of the above 
A) ​Split the gains from trade 
B) Allocate the gains from trade to the seller 
C) Allocate the gains from trade to the buyer 
D) ​All of the above

Question 13

​In the strategic sequential labor negotiation game:

Accepted Answer

A) ​The first mover has an advantage 
B) The second mover has an advantage 
C) There is no advantage to either mover 
D) ​None of the above 
A) ​The first mover has an advantage 
B) The second mover has an advantage 
C) There is no advantage to either mover 
D) ​None of the above

Question 14

​The "axiomic" view of bargaining is the

Accepted Answer

A) ​Strategic view of bargaining 
B) Non-strategic view of bargaining 
C) All of the above 
D) ​None of the above 
A) ​Strategic view of bargaining 
B) Non-strategic view of bargaining 
C) All of the above 
D) ​None of the above

Question 15

​For the following question
Consider a simultaneous move game between a union and a company.If both the parties bargain hard,each would gain nothing.If only one party bargains hard the accommodating party gets a profit of $1 million while the bargaining party gets a $5 million,while if they both accommodate,they each get $3 million.
-​Could either party do better?

Accepted Answer

A) ​Yes,both parties can do better without hurting each other if they cooperated 
B) Yes,one party can do better,but only at the expense of the other 
C) No,neither party can do better 
D) ​No,each party has its best possible outcome 
A) ​Yes,both parties can do better without hurting each other if they cooperated 
B) Yes,one party can do better,but only at the expense of the other 
C) No,neither party can do better 
D) ​No,each party has its best possible outcome

Question 16

​Which of the following will improve your bargaining position when contracting with a supplier

Accepted Answer

A) ​Your supplier merges with an another large supplier of the same product 
B) You redesign your product to be more feasibly accepting of many suppliers' parts 
C) You redesign your product so that your preferred supplier is more integral to product success 
D) ​Your supplier's chief competitor has exited the market 
A) ​Your supplier merges with an another large supplier of the same product 
B) You redesign your product to be more feasibly accepting of many suppliers' parts 
C) You redesign your product so that your preferred supplier is more integral to product success 
D) ​Your supplier's chief competitor has exited the market

Question 17

​For the following question
Consider a simultaneous move game between a union and a company.If both the parties bargain hard,each would gain nothing.If only one party bargains hard the accommodating party gets a profit of $1 million while the bargaining party gets a $5 million,while if they both accommodate,they each get $3 million.
-​If the firm threatens a lockout (and the threat is credible),what is the union's best response?

Accepted Answer

A) ​Bargain hard 
B) Accommodate 
C) Run 
D) ​Hide 
A) ​Bargain hard 
B) Accommodate 
C) Run 
D) ​Hide

Question 18

​The best threat is on

Accepted Answer

A) ​You always have to carry out 
B) You must always carry out 
C) You sometimes have to carry out 
D) ​You never have to carry out 
A) ​You always have to carry out 
B) You must always carry out 
C) You sometimes have to carry out 
D) ​You never have to carry out

Question 19

​In the nonstrategic view of bargaining

Accepted Answer

A) ​The games are played without identifying the specific strategies 
B) Both the parties usually get some positive surplus 
C) The bargaining outcome is affected by both the parties' disagreement values 
D) ​All of the above 
A) ​The games are played without identifying the specific strategies 
B) Both the parties usually get some positive surplus 
C) The bargaining outcome is affected by both the parties' disagreement values 
D) ​All of the above

Question 20

​Which of the following will improve your bargaining position with customers

Accepted Answer

A) ​The product your team produces has become more costly to produce 
B) New firms have entered the market with competing products for the ones your team produces 
C) Your competitors have developed new products that contain more of the features that your team produces 
D) ​There are fewer close substitutes for the product your team supports 
A) ​The product your team produces has become more costly to produce 
B) New firms have entered the market with competing products for the ones your team produces 
C) Your competitors have developed new products that contain more of the features that your team produces 
D) ​There are fewer close substitutes for the product your team supports

In the simultaneous move labor negotiation game:

If,during the negotiations between the union and the management a strike occurs,it would be because

A company that rewards its salespeople based on the number of sales made can expect

Under the non-strategic view of bargaining,the terms of agreement are determined by

To improve your own bargaining position

When buying a car from a commission salesman you improve your bargaining position by

Jill,a bookkeeper,just received an attractive offer from an outside firm and so she asks for a raise from her current employer.She would be in a strong bargaining position because

John Nash,the mathematician responsible for the Nash equilibrium,also proved that any reasonable bargaining outcome would

In the strategic sequential labor negotiation game:

The "axiomic" view of bargaining is the

Which of the following will improve your bargaining position when contracting with a supplier

The best threat is on

In the nonstrategic view of bargaining

Which of the following will improve your bargaining position with customers

The One Lessor of Business

Benefits, Costs, and Decisions

Extent How Much Decisions

Investment Decisions: Look Ahead and Reason Back

Simple Pricing

Economies of Scale and Scope

Understanding Markets and Industry Changes

Market Structure and Long Run Equilibrium

Strategy: the Quest to Keep Profit From Eroding

Foreign Exchange, Trade, and Bubbles

More Realistic and Complex Pricing

Direct Price Discrimination

Strategic Games

Making Decisions With Uncertainty

Auctions

The Problem of Adverse Selection

The Problem of Moral Hazard

Getting Employees to Work in the Firms Best Interest

Getting Divisions to Work in the Firms Best Interest

Managing Vertical Relationships

Filters

Exam 14: Bargaining