Will this information alter your pricing decisions today

Reference no: EM133395927

Question: Price comparison services on the Internet (as well as "shopbots") are a popular way for retailers to advertise their products and a convenient way for consumers to simultaneously obtain price quotes from several firms selling identical products. Suppose that you are the manager of Digital Camera, Inc., a firm that specializes in selling digital cameras to consumers that advertise with an Internet price comparison service. In the market for one particular high-end camera, you have only one rival firm-The Camera Shop-with which you've competed for the last four years by setting prices day after day. Being savvy entrepreneurs, the ease of using the Internet to monitor rival firms' prices has enabled you and your rival to charge extremely high prices for this particular camera. In a recent local business article, you read that The Camera Shop has exhausted its venture capital and that no new investors are willing to sink money into the company. As a result, The Camera Shop will discontinue its operations next month.

Will this information alter your pricing decisions today? Explain your analysis in detail using what you know about game theory.

Reference no: EM133395927

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