HW MANAGERIAL ECONOMICS
MANAGERIAL ECONOMICS
MANAGERIAL ECONOMICS:
A PROBLEM SOLVING APPROACH
Individual Problems 15-4, 15-6 & 16-3
15-On page 170 and 171 in the textbook it is covered with great scenarios. Our questions states
"Does the ability to move first give the employer an advantage?" not only is the best strategy achieved by eliminating the sub optimal strategy, but we also know that when you eliminate
MANAGERIAL ECONOMICS
one of the branches of the tree, or one of the options, you change the nature of the game. And this is usually in your favor. In every scenario in life you can make the situation better by eliminating one of the unwanted options. It's almost like a process of elimination and getting rid of the unfavorable outcomes. This brings me to the last part in the question. "As the employee, is there anything you can do to realize a higher payoff?" again, in the Tree of sequential move games, when you work backwards, it is very obvious which unfavorable outcomes need to be eliminated. And when you do this you are left in the good.
15-6
in reference to the equilibrium of the game, I guess that would be referring to the point
at which the entrant and the incumbent both are equal so there is no pressure on either of them to perform. Therefore, that would mean staying at a loss of 5 for each player. I'm just about there The second half of the question refers to discussing if the entrant is better off with or without the ability to withdraw. Well, withdrawing to me always means the entrant gains nothing. This question however states that the entrance will suffer a loss of 1 in the incumbent will have a gain of 8. However, I see this question two-fold fold because if the entrant does not have the ability to withdraw then possibly they have eliminated any gains, and this question does state that the entrant will either lose 1 in the first scenario or lose 5 in the second. In my opinion the entrant needs to refrain from withdrawing.
MANAGERIAL ECONOMICS:
A PROBLEM SOLVING APPROACH
Individual Problems 15-4, 15-6 & 16-3
15-On page 170 and 171 in the textbook it is covered with great scenarios. Our questions states
"Does the ability to move first give the employer an advantage?" not only is the best strategy achieved by eliminating the sub optimal strategy, but we also know that when you eliminate
MANAGERIAL ECONOMICS
one of the branches of the tree, or one of the options, you change the nature of the game. And this is usually in your favor. In every scenario in life you can make the situation better by eliminating one of the unwanted options. It's almost like a process of elimination and getting rid of the unfavorable outcomes. This brings me to the last part in the question. "As the employee, is there anything you can do to realize a higher payoff?" again, in the Tree of sequential move games, when you work backwards, it is very obvious which unfavorable outcomes need to be eliminated. And when you do this you are left in the good.
15-6
in reference to the equilibrium of the game, I guess that would be referring to the point
at which the entrant and the incumbent both are equal so there is no pressure on either of them to perform. Therefore, that would mean staying at a loss of 5 for each player. I'm just about there The second half of the question refers to discussing if the entrant is better off with or without the ability to withdraw. Well, withdrawing to me always means the entrant gains nothing. This question however states that the entrance will suffer a loss of 1 in the incumbent will have a gain of 8. However, I see this question two-fold fold because if the entrant does not have the ability to withdraw then possibly they have eliminated any gains, and this question does state that the entrant will either lose 1 in the first scenario or lose 5 in the second. In my opinion the entrant needs to refrain from withdrawing.