5 Written questions
5 Matching questions
- Game Theory
- Price Discrimination
- Vertical Merger
- Nash Equilibrium
- a Offering specific goods or services at different prices to different segments of the market. Example: First class versus business class on airlines.
- b Any combination of strategies in which each players' strategy is his or her best choice, given the other players' strategies.
- c A group of firms that collude to limit competition in a market by negotiating and accepting agreed-upon prices and market shares.
- d The theory that studies decision making in situations in which one player anticipates the reactions of other players to its own actions. Firms are mutually interdendent.
- e A merger between firms who have a buyer/supplier relationship. Example: BFGoodrich merging with rubber plantations.
5 Multiple choice questions
- A table that shows the payoffs that each firm earns from every combination of strategies by the firms.
- A merger of firms in unrelated industries. Example: If Purina Dow Chow merged with Pampers Diaper Company.
- A merger between two firms in the same industry. Example: 2004 K-Mart merged with Sears
- A pricing strategy in game theory in which firms continue to match each others' pricing strategy.
- The situation that exists when two or more groups need each other and must depend on each other to accomplish a goal that is important to each of them
5 True/False questions
Price Leadership → A firm whose price decisions are tacitly accepted and followed by others in the industry.
Merger → A group of firms that collude to limit competition in a market by negotiating and accepting agreed-upon prices and market shares.
Concentration Ratio → A measure of market power - the percentage of all sales that is accounted for by the four or eight largest firms in the market
Prisoners' Dilemma → A particular "game" between two captured prisoners that illustrates why cooperation is difficult to maintain even when it is mutually beneficial to do so.
Collusion → An agreement among firms in a market about quantities to produce or prices to charge in attempts to limit competition.