Payoff matrix that fits situation

Assignment Help Business Management
Reference no: EM131174238

Consider two strategically dependent firms in an oligopolistic industry, Firm A and Firm B. Firm A knows that if it offers extended warranties on its products but Firm B does not, it will earn $6 million in profits, and Firm B will earn $2 million. Likewise, Firm B knows that if it offers extended warranties but Firm A does not, it will earn $6 million in profits, and Firm A will earn $2 million. The two firms know that if they both offer extended warranties on their products, each will earn $3 million in profits. Finally, the two firms know that if neither offers extended warranties, each will earn $5 million in profits. (See pages 605-606.)

a. Set up a payoff matrix that fits the situation faced by these two firms.

b. What is the dominant strategy for each firm in this situation? Explain.

Reference no: EM131174238

Questions Cloud

How do organizations measures risk : Identify the major business and financial risks such as interest rate risk, foreign exchange risk, credit, commodity, and operational risks. How do organizations measures risk and what global initiatives exist in financial risk management?
Calculate the drag force on the ball in air at 30°c : A pitcher throws a baseball without spin with a velocity of 20 m/s. If the ball has a circumference of 225 mm, calculate the drag force on the ball in air at 30°C.
Existence of economies of scale and diseconomies of scale : 1. Why is the production function best captured by a non-linear graph? 2. Explain the existence of economies of scale and diseconomies of scale.
The interest rate on the intertemporal budget constraint. : Show the effect of a small increase in the interest rate on the intertemporal budget constraint. Assuming standard preferences for current and future consumption (as shown in Figure 11.4), what will be the effect of the increase in r on the savings r..
Payoff matrix that fits situation : a. Set up a payoff matrix that fits the situation faced by these two firms. b. What is the dominant strategy for each firm in this situation? Explain.
Develope an investment portfolio for a high net worth client : Developing an Investment Portfolio for a High Net Worth Client. Discussion and understanding of the client's goals, analyzing his income and capital needs against the current economic and investment outlook.
How can they develop employee trust in the change process : Why is change so difficult to implement within an organization? What are the reasons people resist change, and what can an organization do to ensure change is well-received and permanent?
Economic inefficiency of a monopolist can be measured : The economic inefficiency of a monopolist can be measured by
Determine the force exerted on the car : Determine the force exerted on the car if it is moving at 1100 km/h in air at atmospheric pressure and 20°c.

Reviews

Write a Review

Business Management Questions & Answers

  Change from the time you first craft

Why do you think your thesis might change from the time you first craft it until your final essay is due? By the way, it's perfectly okay if you thesis does NOT change.

  Realistic project management plan

A project management plan should be realistic in order to be used to manage the project. Which of the following is the BEST method to achieve a realistic project management plan?

  Domestic sales of having multiple distribution

In general, what are the qualitative pros and cons for domestic sales of having multiple distribution centers and shipping locations in the United States?

  Police study & use of force and community policing

Students will select ONE of the subjects listed below and write a 1-page paper outlining the history of the event/experiment/project and final influence(s) of the selected subject on the United States and law enforcement. Students should include thei..

  Define the short-run and long-run

1. Define the short-run and long-run and provide an aviation example.

  Explain the process for exceeding customers expectations

BSBCUS501C Manage Quality Customer Service - Describe how each Council tries to link their customer service standards to their organisational policies and values.

  Business ethics in a scenario

Who else is involved, or should be involved, in this decision? Who has a stake in the outcome? What alternatives are available to you? What are the consequences of each alternative? How would each of your alternatives affect the other people you have..

  Explain which items you will include in each packages

Explain which items you will include in each of these packages and For each of the packages you create and discuss the target market

  How do you apply critical thinking skills while at workhow

how do you apply critical thinking skills while at work?how have the critical thinking skills you have developed while

  Explain individuals like companies are rated for credit risk

Individuals just like few companies are rated for credit risk. Standard and Poors as well as Moodys are the popular credit rating agencies. For entities there is the FICO scoring

  Business owner contracts with the government

Not every business owner contracts with the government. Imagine you are in a purchasing role for the government. Assess the situation and then recommend three to five ways in which you could entice more people to become engaged in contracting with th..

  Description of the product or service that will be provided

How could my firm succeed in foreign markets by applying any of the global strategies? Select a country or countries (or a region) to focus on and explain why that market would be best for my business idea. Remember to discuss institutions.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd