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Two companies are considering their bid strategy for installation of a computer center in a new university. Company A is considering four alternative courses of action; A1-...

      

Two companies are considering their bid strategy for installation of a computer center in a
new university. Company A is considering four alternative courses of action;
A1- bid on both the hardware and the software
A2- bid only on the hardware
A3- bid only on the software
A4- no bid.
Company B is considering three alternative courses of action:
B1- bid on both
B2- bid only on the hardware
B3- no bid.
If Company A bids a1 and Company B bids b1, then the expected payoff to Company A is
again of 2 (units of utility).
Company B is going to have a loss of 2. If company A bids a3 and Company B bids b2, then
thee expected payoff to company A is a loss of 3 (A gain of 3 to Company B). We estimate
thee payoffs in all other possible alternatives and summarize the information in the table
below.
fig171051123.png
Required:
Determine the solution of the game if:
a. Co-operation is not allowed.
b. The Company and the union can negotiate.
c. What are the limitations of a game theory in business applications.

  

Answers


Kavungya
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fig191051242.png
Kavungya answered the question on May 10, 2021 at 09:43


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