Exam 7: The Dynamics Competing Across Time

What type of effect describes how a commitment impacts the present value of the firm's profits,assuming the firm adjusts its own tactical decisions in light of this commitment and that its competitor's behavior does not change?

What type of cooperation-inducing strategy is defined as one so compelling that that a firm would expect all other firms to adopt it?

Why do price-sensitive buyers tend to harm cooperative pricing in a market?

Which of the following statements is true about how the volatility of demand conditions affects the sustainability of cooperative pricing?

Suppose a firm has $50 million to invest in a new market.Given market uncertainties,the firm forecasts a high-scenario where the present value of the investment is $200 million and a low-scenario where the present value of the investment is $20 million.If the firm believes each scenario is equally likely and invests today,what is the net present value of the investment?

Which of the following terms describes the situation created by a large dominant firm where smaller firms can find buyers as long as they sustain a lower price?

In a six-firm market,if all firms charge the monopoly price,the profit equals $120,000.In that same six-firm market,if all firms instead charge the prevailing price,the profit is $60,000.If the pricing period is one-month long,what is the maximum monthly discount rate implied for each firm to still have an incentive to independently price at the monopoly level?

What type of pricing involves a firm quoting a single delivered price for all buyers with the firm absorbing any freight charges itself?

Given the following payoff diagram: How much can firm 1 improve its outcome by committing to a strategy thus transforming the simultaneous move game to a sequential move game?

Which of the following statements is true about a tough commitment?