ST14.1 Game Theory Strategies. Suppose two local suppliers are seeking to win the right to upgrade the

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ST14.1 Game Theory Strategies. Suppose two local suppliers are seeking to win the right to upgrade the communications capability of the internal 'intranets' that link a number of customers with their suppliers. The system quality decision facing each competitor and potential profit payoffs are illustrated in the table. The first number listed in each cell is the profit earned by US Equipment Supply; the second number indicates the profit earned by Business Systems, Inc. For example, if both competitors, US Equipment Supply and Business Systems, Inc., pursue a high-quality strategy, US Equipment Supply will earn $25000 and Business Systems, Inc., will earn $50 000. If US Equipment Supply pursues a high-quality strategy while Business Systems, Inc.,

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Managerial Economics

ISBN: 1518

14th Revised Edition

Authors: Mark Hirschey

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