Decisions(策略决策)

ManagerialEconomicsChapter10GameTheoryandCompetitiveStrategyGuanXizhanSchoolofManagement,FudanUniversityE-Mail:[e-mail]1TopicstobeDiscussedGamingandStrategicDecisions（策略决策）DominantStrategies（上策，占优策略）TheNashEquilibriumRevisitedRepeatedGames（重复博弈）2TopicstobeDiscussedSequentialGames（序贯博弈）Threats,Commitments,andCredibility（威慑、承诺与可信性）EntryDeterrence（进入阻止，进入威慑）BargainingStrategy（讨价还价策略）3GamingandStrategicDecisions“IfIbelievethatmycompetitorsarerationalandacttomaximizetheirownprofits,howshouldItaketheirbehaviorintoaccountwhenmakingmyownprofit-maximizingdecisions?”4GamingandStrategicDecisionsNoncooperativeversusCooperativeGamesCooperativeGame（合作博弈）Playersnegotiatebindingcontracts（有约束力的契约）thatallowthemtoplanjointstrategiesExample:Buyerandsellernegotiatingthepriceofagoodorserviceorajointventurebytwofirms(i.e.MicrosoftandApple)Bindingcontractsarepossible5GamingandStrategicDecisionsNoncooperativeversusCooperativeGamesNoncooperativeGameNegotiationandenforcementofabindingcontractarenotpossibleExample:Twocompetingfirmsassumingtheothersbehaviordetermine,independently,pricingandadvertisingstrategytogainmarketshareBindingcontractsarenotpossible6GamingandStrategicDecisionsNoncooperativeversusCooperativeGames“Thestrategydesignisbasedonunderstandingyouropponent’spointofview,and(assumingyouopponentisrational)deducinghowheorsheislikelytorespondtoyouractions”7GamingandStrategicDecisionsAnExample:Howtobuyadollarbill1)Auctionadollarbill2)Highestbidderreceivesthedollarinreturnfortheamountbid3)SecondhighestbiddermustpaytheamountheorshebidQuestion:Howmuchwouldyoubidforadollar?8AcquiringaCompanyScenarioCompanyA:TheAcquirerCompanyT:TheTargetAwilloffercashforallofT’ssharesWhatpricetooffer?9AcquiringaCompanyScenarioThevalueofTdependsontheoutcomeofacurrentoilexplorationproject.Failure:T’svalue=$0Success:T’svalue=$100/shareAlloutcomesareequallylikely10AcquiringaCompanyScenarioT’svaluewillbe50%greaterwithA’smanagement.A,mustsubmittheproposalbeforetheexplorationoutcomeisknown.TwillnotchoosetoacceptorrejectuntilaftertheoutcomeisknownonlytoT.HowmuchshouldAoffer?11DominantStrategiesDominantStrategyOnethatisoptimalnomatterwhatanopponentdoes.AnExampleA&BsellcompetingproductsTheyaredecidingwhethertoundertakeadvertisingcampaigns12PayoffMatrixforAdvertisingGameFirmAAdvertiseDon’tAdvertiseAdvertiseDon’tAdvertiseFirmB10,515,010,26,813PayoffMatrixforAdvertisingGameFirmAAdvertiseDon’tAdvertiseAdvertiseDon’tAdvertiseFirmB10,515,010,26,8ObservationsA:regardlessofB,advertisingisthebestB:regardlessofA,advertisingisbest14PayoffMatrixforAdvertisingGameFirmAAdvertiseDon’tAdvertiseAdvertiseDon’tAdvertiseFirmB10,515,010,26,8ObservationsDominantstrategyforA&BistoadvertiseDonotworryabouttheotherplayerEquilibriumindominantstrategy15DominantStrategiesGameWithoutDominantStrategyTheoptimaldecisionofaplayerwithoutadominantstrategywilldependonwhattheotherplayerdoes.1610,515,020,26,8FirmAAdvertiseDon’tAdvertiseAdvertiseDon’tAdvertiseFirmBModifiedAdvertisingGame1710,515,020,26,8FirmAAdvertiseDon’tAdvertiseAdvertiseDon’tAdvertiseFirmBModifiedAdvertisingGameObservationsA:Nodominantstrategy;dependsonB’sactionsB:AdvertiseQuestionWhatshouldAdo?(Hint:considerB’sdecision18TheNashEquilibriumRevisitedDominantStrategies“I’mdoingthebestIcannomatterwhatyoudo.”“You’redoingthebestyoucannomatterwhatIdo.”19TheNashEquilibriumRevisitedNashEquilibrium“I’mdoingthebestIcangivenwhatyouaredoing”“You’redoingthebestyoucangivenwhatIamdoing.”20ExamplesWithANashEquilibriumTwocerealcompaniesMarketforoneproducerofcrispycerealMarketforoneproducerofsweetcerealEachfirmonlyhastheresourcestointroduceonecerealNoncooperativeTheNashEquilibriumRevisitedProductChoiceProblem21ProductChoiceProblemFirm1CrispySweetCrispySweetFirm2-5,-510,10-5,-510,1022ProductChoiceProblemFirm1CrispySweetCrispySweetFirm2-5,-510,10-5,-510,10QuestionIsthereaNashequilibrium?Ifnot,why?Ifso,howcanitbereached23BeachLocationGameScenarioTwocompetitors,YandC,sellingsoftdrinksBeach200yardslongSunbathersarespreadevenlyalongthebeachPriceY=PriceCCustomerwillbuyfromtheclosestvendor24BeachLocationGameWherewillthecompetitorslocate(i.e.whereistheNashequilibrium)?Ocean0BBeachA200yardsC25BeachLocationGame2)Examplesofthisdecisionprobleminclude:LocatingagasstationPresidentialelectionsOcean0BBeachA200yardsC26TheNashEquilibriumRevisitedMaximinStrategies（最大最小策略）ScenarioTwofirmscompetesellingfile-encryptionsoftwareTheybothusethesameencryptionstandard(filesencryptedbyonesoftwarecanbereadbytheother-advantagetoconsumers)27TheNashEquilibriumRevisitedMaximinStrategiesScenarioFirm1hasamuchlargermarketsharethanFirm2Bothareconsideringinvestinginanewencryptionstandard28MaximinStrategyFirm1Don’tinvestInvestFirm20,0-10,1020,10-100,0Don’tinvestInvest29MaximinStrategyFirm1Don’tinvestInvestFirm20,0-10,1020,10-100,0Don’tinvestInvestObservationsDominantstrategyFirm2:InvestNashequilibriumFirm1:investFirm2:Invest30MaximinStrategyFirm1Don’tinvestInvestFirm20,0-10,1020,10-100,0D