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On the way to my mother's house for Thanksgiving dinner, my wife was on her phone and noted that Old Navy was going to be

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On the way to my mother's house for Thanksgiving dinner, my wife was on her phone and noted that Old Navy was going to be open for Black Friday sales starting on Thursday at 3pm. Many people lament the fact that stores are open very early the day after Thanksgiving or, as it seems, even open on Thanksgiving day itself. The owners, managers, and employees of retail stores presumably would enjoy spending Thanksgiving with their families instead of preparing for Black Friday sales, yet almost every store announces that it will open very early on Friday moming for shoppers. How might game theory offer an explanation for this unexpected behavior? Select one: a. Being only one day out of the year, Black Friday is a one-shot game. Stores know that they can survive being closed on that single day because it will not reduce the overall demand of all consumers at the beginning of the holiday shopping season. If each store is closed on Black Friday, it will increase the frequency of shopping trips (and thus profit) on the remaining days that the stores are actually open. b. The stores appear to be involved in a prisoner's dilemma. Each store would prefer to be closed on Thanksgiving (and probably the morning of Biack Friday too), but the incentive facing a single store is to remain open in order to attract sales to itself. If one store was open and the rest were closed, the stores that remained closed would have fewer consumers and sales afterwards. So though each would prefer to stay closed. each finds it in its own best interest to stay open. c. Being open on Black Friday is a suboptimal choice, or a dominated strategy, but firms are forced to choose it. The dominant strategy of staying closed on that day provides each firm, and the industry overall, the most profit, but no single firm has an incentive to choose it since it is dominant. d. Being open on Black Friday is a consequence of not being the Tirst mover" in a sequential game. The store that decides to stay closed on that day gets a first mover advantage in setting an employee-friendly precedent for other stores. The other stores who attempt to imitate this behavior are seen as not being original, or as copying the "irst mover" store, so most of them (the "second" and "third" movers) stay open on that day

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