Applying Game Theory to
Strategy. Prior to engaging in
this discussion, please read Chapter 16 in the text and review any relevant
Instructor Guidance. It is suggested that you review the recommended articles
to glean any helpful information. Imagine that you own a pharmacy in your area.
One of your competitors launches a “We will not be undersold” campaign, which
promises consumers 150 % of any difference between its prices and the
advertised prices of other pharmacies. Evaluate the social issues in your
community as well as the economic culture that is influencing this type of
pricing competition. Develop and describe a microeconomic model that is
responsive to the service demands of your market. Based on your conclusions,
how would you react to this situation and with what business strategy would you
approach this? How might you apply game theory to the creation of your
strategy?
