oligopoly are affected. Business decisions must always consider competitor’s influence / reaction. An oligopoly may agree to maintain artificially high prices – technically illegal but difficult to prove if nothing is in writing. Duopoly – taken literally a duopoly means 2 firms control a market. In reality is usually means that 2 firms dominate a market by having the biggest share in it. Examples of duopolistic markets include Coca Cola and Pepsi as dominant suppliers of soft drinks. There
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Oligopoly An oligopoly is a market form in which a market or industry is dominated by a small number of sellers (oligopolists). Oligopolies can result from various forms of collusion which reduce competition and lead to higher costs for consumers.[1] With few sellers‚ each oligopolist is likely to be aware of the actions of the others. The decisions of one firm therefore influence and are influenced by the decisions of other firms. Strategic planning by oligopolists needs to take into account the
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lobbies and group B doesn’t. The payoffs for the four possibilities are shown in Figure 1‚ with the first number in each cell representing the payoff to group A‚ and the second number in each cell representing the payoff to group B. Collectively the best outcome is for neither group to seek political advantages‚ concentrating on creating new wealth rather than fighting over existing wealth. In this case both groups make the cooperative choice and receive a payoff of 100‚ illustrated in cell
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manufacturing (which products to produce‚ how much to produce‚ which technology to invest) marketing (new products‚ promotion strategies)‚ & so on. 3 – Decision Analysis 3 A list of alternatives. A list of possible future states of nature. Payoffs associated with each alternative/state of nature combination. An assessment of the degree of certainty of possible future events. A decision criterion. The list of alternatives must be the set of mutually exclusive and collectively exhaustive decisions
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which state occurs. Payoff tables are organized so that the decision situations can be analyzed. Using a payoff table is a means of organizing a decision situation‚ including the payoffs from different decisions‚ given the various states of nature. Each decision will result in a specific outcome corresponding to the particular state of nature that occurs in the future. Payoffs are usually expressed as revenues or costs‚ but the can be expressed in a variety of values. Once a payoff table has been organized
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Industrial Analysis The Plastic Pipe Manufacturing Industry Prepared by Lau Yee Leong‚ Mike Master of Management‚ Taylors University Lakeside Contents No. | Description | Page Number | | | | 1.0 | Market Assessment | 3 | | | | 2.0 | Internal Rivalry | 4 | | | | 3.0 | Barriers to Entry | 5 | | | | 4.0 | Supplier Power | 6 | | | | 5.0 | Buyer Power | 7 | | | | 6.0 | Substitutes | 9 | | | | 7.0 | Conclusion | 10 | | | | 8.0 | List
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DECISION ANALYSIS PROBLEMS Many decision analysis problems can be viewed as having three variables: decision alternatives‚ states of nature‚ and payoffs. • Decision alternatives are the various choices or options available to the decision maker in any given problem situation. On most days‚ financial managers face the choices of whether to invest in blue chip stocks‚ bonds‚ commodities‚ certificates of deposit‚ money markets‚ annuities‚ and other investments. Construction decision makers must
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Case Study: Property Purchase Strategy Table of Contents Main Report 3 Introduction3 Decision Analysis 3 Increasing the expected payoff 5 Conclusion 5 Appendix6 Decision Tree6 Calculation of probabilities 7 Calculation of expected payoff8 Relationship between the expected payoff and amount of bid9 Introduction Decision analysis is an integral and powerful component in the decision making process‚ and can be used to determine the optimal decision alternative according to the criterion
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Total 0 2.15 Question 3 (a) The payoff to a short forward at expiration is equal to: Payoff to short forward = Forward price – Spot price at expiration Therefore‚ we can construct the following table: Price of Asset in 6 Agreed Forward Price months Payoff to Short Forward 40 10 45 50 5 50 50 0 55 50 -5 60 (b) The payoff 50 50 -10 to a purchased put option at expiration is: Payoff to long put option = max [0‚ Strike price
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1. Nash equilibrium is where one player maximizes his payoff and the other doesn’t. is where each player maximizes his own payoff given the action of the other player. is where both players are maximizing their total payoff. is a unique prediction of the likely out-come of a game. Use the following to answer Questions 2–4: Consider the following information for a simultaneous move game: Two discount stores (mega-store and superstore) are interested in expanding their market share through advertising
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