Introduction
Game theory, in this essay, means the study of strategies adopted by rational decision-makers of economic agents in specific situations, analyzing outcomes of mathematical models of conflict and cooperation (Myerson, 1991). Its basic elements include players, actions, information, strategies, payoffs, outcome and equilibrium, among which, players, strategies and payoffs are the most essential; actions and outcome are called as rules of the game (Rasmusen, 2000). The objective of the model is to establish equilibrium with the use of rules of the games. Nash equilibrium, an important terminology in Game theory, is the situation when two or more players are involved in the game, and each player is supposed to know other players’ equilibrium strategies; players will get nothing just by changing their own strategy (Gibbons, 1992: p.8). Entry deterrence game, as a typical example in industrial economics, can be seen in the competitive markets in real society will be regarded as an object to be discussed In the subsection, firstly, entry deterrence game will be put into four classical types of game theories for analyzing and different strategies for the players in the games will be work out by using the given models; then the use of game theory in real entry deterrence will be slightly discussed. Model Analysis

The first situation is the entry deterrence under the static games of complete information. Suppose that there is already a monopolist company B as the incumbent in a specific industry; another company A as the entrant wants to enter this market. All the information in this market is open to A and B. B, in order to keep its profit, will try to prevent A from entering the market. There are two strategies for A to choose---to enter or to stay out; if entry occurs, there will be two choices for B---to collude or to fight. Suppose the entry costs are 10; duopoly profit---100 will be split evenly to A and B if B collude when A enters. Table 1...

...Consider a firm that is contemplating entry into a new market. What
contribution, if any, can gametheory make to the analysis of the economic
viability of such a strategy? Refer to the critical time line, reaction functions
and the Nash premise in your reply.
Introduction:
Management decisions lack the full information, so they are bounded rationality decisions.
Companies are players in a game, and thegame dimensions are defined in terms of geography and product. So any new entrant will try to enter the market he will play a game in two dimensions geography and product (example Apple entering the smart phone market).
The entrant has to decrease its price from the market price so he can guarantee a portion of the market share (steal market share from the incumbents).
The incumbents have two options: either to compete or to accommodate.
We introduce the principles of the GameTheory as follows:
Critical Timeline:
Management can observe behaviour as signals and as patterns in the signals.
Patterns do emerge in the observed behaviour, patterns in price movements or patterns to do with achieving growth through acquisition. The patterns create a critical timeline (CTL) of observed actions and as the CTL unfolds, it reveals a strategy.
The new entrant has to observe these patterns and management types of the incumbents over a...

...NEGOTIATION
Negotiation theory
Last updated 9 months ago
The foundations of negotiation theory are decision analysis, behavioral decision making, gametheory, and negotiation analysis. Another classification of theories distinguishes between Structural Analysis, Strategic Analysis, Process Analysis, Integrative Analysis and behavioral analysis of negotiations.
Individuals should make separate, interactive decisions; and negotiation analysis considers how groups of reasonably bright individuals should and could make joint, collaborative decisions. These theories are interleaved and should be approached from the synthetic perspective.
Common Assumptions Of Most Theories
Negotiation is a specialized and formal version of conflict resolution most frequently employed when important issues must be agreed upon. Negotiation is necessary when one party requires the other party's agreement to achieve its aim. The aim of negotiating is to build a shared environment leading to long-term trust and often involves a third, neutral party to extract the issues from the emotions and keep the individuals concerned focused. It is a powerful method for resolving conflict and requires skill and experience. Zartman defines negotiation as "a process of combining conflicting positions into a common position under a decision rule of unanimity, a phenomenon in which the outcome is determined by...

...GAMESTHEORY
In gametheory, Nash equilibrium (named after John Forbes Nash, who proposed it) is a solution concept of a game involving two or more players, in which each player is assumed to know the equilibrium strategies of the other players, and no player has anything to gain by changing only his own strategy unilaterally. If each player has chosen a strategy and no player can benefit by changing his or her strategy while the other players keep theirs unchanged, then the current set of strategy choices and the corresponding payoffs constitute Nash equilibrium.
Stated simply, Amy and Phil are in Nash equilibrium if Amy is making the best decision she can, taking into account Phil's decision, and Phil is making the best decision he can, taking into account Amy's decision. Likewise, a group of players is in Nash equilibrium if each one is making the best decision that he or she can, taking into account the decisions of the others. However, Nash equilibrium does not necessarily mean the best payoff for all the players involved; in many cases, all the players might improve their payoffs if they could somehow agree on strategies different from the Nash equilibrium: e.g., competing businesses forming a cartel in order to increase their profits.
The prisoner's dilemma is a fundamental problem in gametheory that demonstrates why two people might not cooperate even if it...

...problem, what is the Nash equilibrium in prices?
p1 = p2 = MC = 6
5. (20 total points) Suppose that two players are playing the following game. Player 1 can choose either Top or Bottom, and Player 2 can choose either Left or Right. The payoffs are given in the following table:
Player 2
Player 1
Left
Right
Top
1 2
5 3
Bottom
2 2
3 1
where the number on the left is the payoff to Player A, and the number on the right is the payoff to Player B.
a) (2 points) Does player 1 have a dominant strategy, and if so what is it? NO
b) (2 points) Does player 2 have a dominant strategy and if so what is it? NO
c) (2 points each) For each of the following strategy combinations, write TRUE if it is a Nash Equilibrium, and FALSE if it is not:
i) Top/Left FALSE
ii) Top/Right TRUE
iii) Bottom/Left TRUE
iv) Bottom Right FALSE
d) (2 points) If each player plays their maximin strategy, what payoff will each of them receive?
BOTTOM/LEFT (2,2)
e) (2 points) Suppose the game is player where Player 1 chooses its strategy first and then Player 2 chooses its strategy. Using the backward induction method we discussed in class, what will be the outcome of the game?
TOP/RIGHT (5,3)
f) (4 points) This game has a unique Nash Equilibrium in mixed strategies where Player 1 plays Top with...

...Beauty Contest Experiment
The experiment executed in the seminar was very simple. Players had to choose a number between 0 and 100. The objective is to choose a number based on your guess of the mean guesses of the group and multiply it by 2/3. It is called the Beauty contest Experiment because it was based on a theory John Maynard Keynes proposed on the relationship of the stock market with beauty contests conducted in newspapers of his time. In this report I will examine the logic behind choosing the best response strategy in theory and compare it with the actual results of the experiment conducted. From the comparison I will provide justification for why the theory is different from reality by also comparing it to examples in real life.
To understand the underlying logic of the game’s strategy one must understand the Nash Equilibrium. Princeton University’s Website (an excellent source since John Nash the person who came up with the Equilibrium attended that university) defines Nash Equilibrium as “a solution concept of a game involving two or more players, in which each player is assumed to know the equilibrium strategies of the other players, and no player has anything to gain by changing only his or her own strategy unilaterally. If each player has chosen a strategy and no player can benefit by changing his or her strategy while the other players keep theirs unchanged, then the current set of strategy choices...

...GameTheory
International Business Management
Preface
Since GameTheory is a tool used to analyze strategic behavior by taking into consideration how participants expect other to behave I thought about an everyday example in my life. I wanted to analyze my job at the bar and take into account some independent parties that compete with me. Since it’s not my choice who my boss will hire or fire I was interested in how each decisions outcome would be for the corresponding parties. What would be my benefits, considering different situations?
The game begins:
To finance my studies I work as a waitress in a bar. Usually, the bar is very crowded and it is difficult to serve all the guests. It is a tough job and sometimes very exhausting but serving all the guests is still doable. Nevertheless my boss realized that doable doesn’t mean high quality service. Due to the delay in receiving their order, customers sometimes complain to the boss. My boss is now in dilemma what to do. He could either replace me with a new waitress, hoping for better quality service with her, or he could hire a new waitress to support me in serving the customers and therefore have 2 waitresses serving. However, he knows the delay is most probably due to crowded bar and not due to lack of knowledge and skills form my side, he is having in mind to get a second waitress and have two waitresses, which will...

...11-0976
MOSES NGONE 10-
PRESENTED TO: Mr. MORIASI MARANGA
DUE DATE: 29TH OCTOBER 2013
DEPARTMENT OF COMMERCE
SCHOOL OF BUSINESS AND ECONOMICS
ATHIRIVER CAMPUS
Table of Contents
GameTheory 3
History and impact of gametheory 5
Gametheory and information systems 6
Definition of key terms 6
Dominance 8
Nash equilibrium 8
Mixed strategies 9
Extensive games with perfect information 9
Extensive games with imperfect information 10
Zero-sum games and computation 11
Bidding in auctions 12
GameTheoryGametheory is the formal study of conflict and cooperation. Game theoretic concepts apply whenever the actions of several agents are interdependent. These agents may be individuals,
groups, firms, or any combination of these. The concepts of gametheory provide a language to formulate structure, analyze, and understand strategic scenarios.
The object of study in gametheory is the game, which is a formal model of an interactive situation. It typically involves several players; a game with only one player is usually called a decision problem. The formal definition lays out the players, their preferences, their information, the strategic actions available to them, and how these influence the...

...Workbook for GameTheory and Political Economy1
Martin Gregor IES, Charles University in Prague January 23, 2012
set of sample exercises has been created for the undergraduate course JEB064 GameTheory and Political Economy given by Martin Gregor at IES, Charles University, Prague. Each exercise includes a full solution. The workbook is a work in permanent construction. Any comment is more than welcome.
1 This
2
Contents
1 Essentials in gametheory 1.1 Centipede game (Rasmusen 2007) . . . . . . . . . . 1.2 Dirty campaign (lecture notes by Boehmke) . . . . . 1.3 George W. Bush in 2004 (lecture notes by Boehmke) 1.4 The Monty Hall problem (Rasmusen 2007) . . . . . 1.5 Elmer’s apple pie (Rasmusen 2007) . . . . . . . . . 1.6 Cancer tests (McMillan 1992) . . . . . . . . . . . . 1.7 The Battleship Problem (Nalebuff 1988) . . . . . . . 1.8 Joint ventures (Rasmusen 2007) . . . . . . . . . . . 7 7 8 9 10 11 12 13 13 17 17 17 18 19 19 20 20 21 22 22 22 23 25 26 26 27 28 30 31 32 32 33 33 34
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