Game theory and segmentation | Management homework help

  

  • 1.  Read the article titled “Game Theory” at http://www.econlib.org/library/Enc1/GameTheory.html.  In the article, the authors discussed a classic case of game theory  (zero-sum games) of the Prisoner’s Dilemma (PD). There are many  variations of this game in use. Suggest the manner in which  organizations could apply PD to their business’ strategy formulation.  Provide support for your response. 
  • 2.  Use the Internet to research two to three (2-3) articles on the North  American automobile and its market segments. Next, analyze the key ways  that segmentation provides a competitive advantage or disadvantage to  the North American automobile. Provide a rationale for your response.

3. Please respond to this post.

 The  author made it clear that the outcome of any game is dependent on the  strategies applied. It can be in form of cooperative or conflict to gain  advantage. This PD has been a prevailing issues across all industries.  Either in Automobile or in Food chain industry, Tech companies et cetra  have all engaged in competition and still ongoing. Another example is in  the Airline industry.   Organization could apply PD   base on the  industry they operate, what is the economy driver, cost analysis and  goals to meet the objective. Example is with the Airline industry, Delta  started applying the Prisoner’s Delima in its organization when it  began to increase airfare and baggage fees to substantiate fuel costs  and other maintenance issues associated with airline services in  general, creating equilibrium. Delta expect other carriers to follow  suit. However, if Delta was the only airline to increase its prices  (dominant) and other competitors begin to see a rise in their sales  viewing it as a competitive advantage and didn’t follow suit  (dominated); all of the airlines would experience a less than desired  outcome (Delta – would experience less profits due to customers going to  other airlines to book travel) and (competitive airlines – would  experience the costs of high priced fuel, in which their increase in  sales during that specific timeframe wouldn’t exponentially increase  their profits enough to maintain lower priced airfare). 

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