【導(dǎo)讀】DominantStrategies. RepeatedGames. SequentialGames. Threats,Commitments,andCredibility. EntryDeterrence. BargainingStrategy. Auctions. ”。CooperativeGame. NoncooperativeGame. Scenario. CompanyT:TheTarget. Projectfailure:T’svalue=$0. Projectsuccess:T’svalue=$100/share. T’svaluewillbe50%greaterwithA’s

　　

【正文】 ntary goods: ?Firm 1 has cost advantage in Good A ?Firm 2 has cost advantage in Good B 169。2020 Pearson Education, Inc. Chapter 13 80 Bargaining Strategy Firm 1 Produce A Produce B Produce A Produce B Firm 2 40, 5 50, 50 5, 45 60, 40 169。2020 Pearson Education, Inc. Chapter 13 81 Bargaining Strategy ? With collusion: ?Firm 1 Produces A and Firm 2 produces B (50,50) ? Without collusion: ?Firm 1 produces A and Firm 2 produces B (50,50) ?Nash equilibrium Firm 1 Produce A Produce B Produce A Produce B Firm 2 40, 5 50, 50 5, 45 60, 40 169。2020 Pearson Education, Inc. Chapter 13 82 Bargaining Strategy ?Suppose each firm is also bargaining on the decision to join in a research consortium with a third firm ?Dominant strategy is for both firms to enter consortium 169。2020 Pearson Education, Inc. Chapter 13 83 Bargaining Strategy Firm 1 Work alone Enter consortium Work alone Enter consortium Firm 2 10, 10 10, 20 40, 40 20, 10 169。2020 Pearson Education, Inc. Chapter 13 84 Bargaining Strategy ?Linking the Bargaining Problem ?Firm 1 announces it will join the consortium only if Firm 2 agrees to produce A and Firm 1 will produce B ?Firm 2’s best interest is to produce A with Firm 1 producing B ?Firm 1’s profit increases from 50 to 60 169。2020 Pearson Education, Inc. Chapter 13 85 Bargaining Strategy ?Strategic moves can be used in bargaining ?Combining issues in bargaining can benefit one side at other’s expense 169。2020 Pearson Education, Inc. Chapter 13 86 WalMart Stores’ Preemptive Investment Strategy ?How did WalMart bee the largest retailer in the . when many established retail chains were closing their doors? ?Gained monopoly power by opening in small towns with no threat of other discount petition ?Preemptive game with Nash equilibrium 169。2020 Pearson Education, Inc. Chapter 13 87 The Discount Store Preemption Game WalMart Enter Don’t enter Enter Don’t enter Company X 10, 10 20, 0 0, 0 0, 20 169。2020 Pearson Education, Inc. Chapter 13 88 The Discount Store Preemption Game ? Two Nash equilibrium ?Low left ?Upper right ? Must be preemptive to win WalMart Enter Don’t enter Enter Don’t enter Company X 10, 10 20, 0 0, 0 0, 20 169。2020 Pearson Education, Inc. Chapter 13 89 Entry Deterrence ?Barriers to entry important for monopoly power ?Economies of scale, patents and licenses, access to critical inputs ?Firms can also deter entry ?To deter entry, the incumbent firm must convince any potential petitor that entry will be unprofitable 169。2020 Pearson Education, Inc. Chapter 13 90 Entry Possibilities Incumbent (I) Enter Stay out High price (acmodation) Low Price (warfare) Potential Entrant (X) ($80 fixed costs) 100, 20 200, 0 130, 0 70, 10 169。2020 Pearson Education, Inc. Chapter 13 91 Entry Deterrence ?Scenario ?If X does not enter, I makes a profit of $200 million ?If X enters and charges a high price, I earns a profit of $100 million and X earns $20 million ?If X enters and charges a low price, I earns a profit of $70 million and X earns $10 million 169。2020 Pearson Education, Inc. Chapter 13 92 Entry Deterrence ?Could threaten X with warfare if enters market ?Not credible because once X has entered, it is in your best interest to acmodate and maintain high price 169。2020 Pearson Education, Inc. Chapter 13 93 Entry Deterrence ?What if firm I makes an investment before entry to increase capacity? ?Irrevocable mitment ?Gives new payoff matrix since profits will be reduced by investment ?Threat is pletely credible ?Rational for Firm X to stay out of market 169。2020 Pearson Education, Inc. Chapter 13 94 Entry Deterrence Incumbent (I) Enter Stay out High price (acmodation) Low price (warfare) Potential Entrant (X) 50, 20 150, 0 130, 0 70, 10 169。2020 Pearson Education, Inc. Chapter 13 95 Entry Deterrence ?If incumbent has reputation of price cutting petitors even at loss, then threat will be credible ?Short run losses may be offset by long run gains as monopolist 169。2020 Pearson Education, Inc. Chapter 13 96 Entry Deterrence ?Production of mercial airlines exhibit significant economies of scale ?Airbus and Boeing considering new aircraft ?Suppose it is not economical for both firms to produce the new aircraft 169。2020 Pearson Education, Inc. Chapter 13 97 Development of a New Aircraft Boeing Produce Don’t produce Airbus 10, 10 100, 0 0, 0 0, 120 Produce Don’t produce 169。2020 Pearson Education, Inc. Chapter 13 98 Development of a New Aircraft ? Boeing has head start ? Boeing will produce ? Airbus will not produce Boeing Produce Don’t produce Airbus 10, 10 100, 0 0, 0 0, 120 Produce Don’t produce 169。2020 Pearson Education, Inc. Chapter 13 99 Development of a New Aircraft ?Governments can change oute of game ?European government agrees to subsidize Airbus before Boeing decides to produce ?With Airbus being subsidized, the payoff matrix for the two firms would differ significantly 169。2020 Pearson Education, Inc. Chapter 13 100 Development of an Aircraft After European Subsidy Boeing Produce Don’t produce Airbus 10, 10 100, 0 0, 0 0, 120 Produce Don’t produce 169。2020 Pearson Education, Inc. Chapter 13 101 Boeing Produce Don’t produce Airbus 10, 10 100, 0 0, 0 0, 120 Produce Don’t produce Development of an Aircraft After European Subsidy ? Airbus will produce ? Boeing will not produce 169。2020 Pearson Education, Inc. Chapter 13 102 Diaper Wars ?Even though there are only two major firms, petition is intense ?The petition occurs mostly in the form of costreducing innovation ?Small cost savings can lead to capturing of market share ?Both firms spend significantly on Ramp。D 169。2020 P