Managerial Economics - Final Example

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1. Game Theory A. Question #9-6 (basketball players…) Barbara: a. Both Compete = 12 points (individually) ? 24 points (together) b. Monopolize = 18 points (individually) ? 20 points (together) c. Cooperates = 2 points (individually) ? 20 points (together) d. Monopolize = 8 points (dual) ? 16 points Juanita: e. Both Compete = 12 points (individually) ? 24 points (together) f. Monopolize = 18 points (individually) ? 20 points (together) g. Cooperates = 2 points (individually) ? 20 points (together) h. Monopolize = 8 points (dual) ? 16 points Matrix: 1-A Question 1: If the players play only once, what strategy do you expect the players to adopt? Answer 1: An assumption is made that it is an implicit…show more content…
skilled restaurant chefs. Since, the skilled-labor level of her employees is relatively low; Mrs. Fields can afford to financially compensate them well. Mrs. Fields’ anti-franchising policy is economically sound in that the cookie industry is extremely competitive and the premium that customers pay for Mrs. Fields’ cookies is for their perceived quality, which enforces the premise of a high elasticity of demand. If the quality of the cookies were to degrade under the control of a Mrs. Fields’ franchise then greater price sensitivity for her cookies would exist. Greater price sensitivity for her already high priced cookies would spell disaster for not only franchise operated Mrs. Fields operations but the entire company. At the operational level of a company owned Mrs. Fields location the incentive pay package is most probably group performance designed. Individual locations may have staffs of up to 6 people; however, 2-3 persons would be manning the location at any given time. The small number of people involved in a given location leads to greater oversight of the group performance dynamic. The ability of a single employee to shirk their responsibilities unnoticed is extremely slim. Therefore, it is in the best interest of all of the employees to avoid
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