Surname 1NameInstructorCourseDateCoalitional gamesLaura, Sheena, and Grace, three students at DMU, are the owners of thestart-up firm LSG in Leicester. They will join forces with two other start-ups,B1 and S2, to expand their portfolio of products and increase their marketshare. LSG generates a total of £420 in profits on its own, while B1 produces£260 in profits alone and S2 reports £140 in profits. All measures are inthousands. The three firms have collaborated before, generating joint profitsof £680 for LSG and B1, for LSG and S2 of £600, and for B1 and S2 were ableto make £420 together. After the merger happens, it is estimated that thethree firms together will generate a total profit of £1400. Table 1 summarisesthe profits (v(S)) for each joint venture S.1.To meet the rationality condition for each firm, how shouldthe £1400 joint profit be split? (5 marks)Assumption:Each firm has to receive equal or more than they would obtainon their own without the coalition to meet the rationality condition.
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Game Theory,English-language films,Coalition government,Firm,coalition,LSG