Lecture 11

Lecture 11

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Unformatted text preview: 10/19/10 Strategies and Payoffs Lecture 11 Games in which Timing Ma7ers •  Some markets are characterized by strategic interdependence –  Oligopoly and monopolisDc compeDDon •  AcDons have payoffs that depend on –  The acDons –  The acDons of others –  When they are taken When Timing Ma7ers •  One party moves first –  The second can adjust his strategy accordingly Simultaneous Decisions Dodge Viper's Options Chevy Corvette's Options Hybrid Hybrid Chevy: $60 M Dodge: $60 M No hybrid Chevy: $70 M Dodge: $80 M No Hybrid Chevy: $80 M Dodge: $70 M Chevy: $50 M Dodge: $50 M •  Viper and Corve7e hybrid models –  Modeled as a simultaneous game when players move at the same Dme, the payoff matrix shows no dominant strategy Suppose Dodge Moves First Offer hybrid B Offer hybrid Don’t offer hybrid Offer hybrid Don’t offer hybrid Threats and Promises •  Cre...
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This note was uploaded on 11/07/2010 for the course ECON ECON 2 taught by Professor Hamilton during the Fall '09 term at UCSD.

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