It may seem as though basic static games are too simple to describe the strategi

Question

It may seem as though basic static games are too simple to describe the strategic choices faced by modern transnational firms. Yet simple normal-form games apply to the case studies presented in both of the textbooks. Present your observation of what many of these cases have in common. This is your rule category. Point out the cases that are exceptions, if any, and why you think they are different from the others. This is your exception category. In response to your classmates’ posts, explain what circumstances would have to change to move a case from the rule category to the exception category, or vice versa.

Explanation / Answer

Game structures are mostly simple, The choices are reflected based upon future circumstances, The example of firms co-operating with each other is very simple, If both firms co-operate and do not spend on advertising both get reasonable revenue,

While if one firm advertises and another do not then one would just loose the revenue. In order to co-operate both firms must be sure that there is no third entrant who would change the game all together.

Related Questions

Navigate

• Browse (All)
• Browse I
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.