UPS and FedEx both struggle to deliver the surge of packages they receive during the December holiday
Question:
UPS and FedEx both struggle to deliver the surge of packages they receive during the December holiday season. According to an article in the Wall Street Journal, in 2014, both firms considered charging Amazon and other firms rates that would be 10 percent higher for packages delivered during the week before Christmas. Such higher rates would likely have increased the profits of both firms. Neither UPS nor FedEx actually raised rates during the 2014 holiday season, but both firms did raise them during the 2016 holiday season. Use game theory to explain why in 2014 neither firm raised rates during the holiday season, but two years later both firms did.
Step by Step Answer:
Essentials Of Economics
ISBN: 9780134797731
6th Edition
Authors: R. Glenn Hubbard, Anthony Patrick O brien