Chapter 7 Game Theory and Competitive Strategy
Chapter 7 Game Theory and Competitive Strategy
Topics to be discussed a Gaming and strategic decisions ■ Dominant strategies a The Nash equilibrium revisited ■ Repeated games Game Theory 西南民族大学 Slide 2
Game Theory 西南民族大学 Slide 2 Topics to be Discussed ◼ Gaming and Strategic Decisions ◼ Dominant Strategies ◼ The Nash Equilibrium Revisited ◼ Repeated Games
Topics to be discussed ■ Sequential games Threats, Commitments, and credibility ■ Entry Deterrence ■ Bargaining strategy ■ Auctions Game Theory 西南民族大学 Slide 3
Game Theory 西南民族大学 Slide 3 Topics to be Discussed ◼ Sequential Games ◼ Threats, Commitments, and Credibility ◼ Entry Deterrence ◼ Bargaining Strategy ◼ Auctions
Gaming and Strategic Decisions ■“ If i believe that my competitors are rational and act to maximize their own profits, how should i take their behavior into account when making my own profit-maximizing decisions? Game Theory 西南民族大学 Slide 4
Game Theory 西南民族大学 Slide 4 Gaming and Strategic Decisions ◼ “If I believe that my competitors are rational and act to maximize their own profits, how should I take their behavior into account when making my own profit-maximizing decisions?
Gaming and Strategic Decisions a Noncooperative versus Cooperative games ● Cooperative game +Players negotiate binding contracts that allow them to plan joint strategies o Example: Buyer and seller negotiating the price of a good or service or a joint venture by two firms (i.e. Microsoft and Apple o Binding contracts are possible Game Theory 西南民族大学 Slide 5
Game Theory 西南民族大学 Slide 5 Gaming and Strategic Decisions ◼ Noncooperative versus Cooperative Games ⚫ Cooperative Game ◆Players negotiate binding contracts that allow them to plan joint strategies ⚫Example: Buyer and seller negotiating the price of a good or service or a joint venture by two firms (i.e. Microsoft and Apple) ⚫Binding contracts are possible