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CDPSG1[CO] Chapter 3 Game Theory, G1 (Thera, Felline, Vivianna, Winnie),…

- - - - Hard to get more than your added value
        
        what you can take limited by what you bring
  - - - Adam
        
        26 black cards (2600$)
        
        Sum of added values 5200$
        
        His added value equals the total value of the game (2600$)
      - Each Student
        
        1 red card (100$)
        
        total 26 students (red cards)
        
        One less match thus 100$ is lost (for each student)
        
        End up with half of their added value
    - - Barry
        
        23 black cards (2300$)
        
        Smaller Pie
        
        Smaller pie that not enough to match up
      - Each Student
        
        0$
        
        total 26 students (red cards)
        
        Three students are going to end up without a match
        
        No one student is essential to the game
        
        Barry is only one with any claim to the pie
  - - - look at only half of the equation :red_cross:
        
        Without you Adam will end up with none of 100$
        
        IF I enter this , what do I add
        
        consider how much the other players are willing to pay to have you in the game :check:
        
        focusing the minimum payoff you're willing to accept :green_cross:
      - Confuse your individual added value with the larger added value of a group of people in the same position as you:red_cross:
        
        Students overplay their hand
        
        Changing the game by banding together and acting as a single player
        
        The added value of cars is huge
        
        the added value of Ford is limited
        
        think they have some added value , without student Barry gets nothing?
  - - - Story
        
        retrospectively
        
        how the fortunes of the other players in the game would have been different had one of the players been absent
        
        prospectively
        
        how the fortunes of the other players in the game would be affected if one of the player were to leave
      - actor
        
        Jimmy Stewart's added value
        
        Established Movie Star's added value
        
        Enormous
        
        Greatest returns on movies
        
        Don't have stars but still take off
        
        Great movie create star
        
        need to paid their newfound added value next time
        
        Home Alone
        
        Unpaid stars
        
        Animated features
        
        No human stars to pay
        
        none animators are irreplaceable
        
        Dreamworks SKG join the game
        
        the added value of an animator is rising
        
        Disney replaces human animators with computer-generated imagery
- - - - Original Card Game
        
        Add a simple rule
        
        What would you do this time?
        if you are Adam
        
        offer less than $50
        
        the student's position
        is strong :question:
        
        Adam's position
        is strong :question:
        
        The vast majority of people
        —95%—WOULD TAKE $10.
        
        1 more item...
        
        split the pie 50/50
        
        the student accepts
        
        That sounds FAIR.
        
        1 more item...
        
        Only Adam can make offers
        
        a one shot, take-it-or-leave-it negotiation
        
        no structure to the negotiations
        
        no time limit on the negotiations
- - - - states a price
        
        state half the value
        
        ex: if you value the venture as $100,state $50
        
        half the pie
        
        consider other partner's perception :star:
        
        what does your partner think the venture is worth?
        
        example:
        
        perception of the venture value
        
        you=$100
        
        price: $50
        
        your partner=$60
        
        which price your partner equally happy to buy or sell?
        
        price: $31-35
        
        1 more item...
    - - buy or sell
        
        if, you value the venture at $100
        
        partner states price below $50
        
        buy
        
        no downside, potentially upside
        
        partner states a price above $50
        
        sell
- - - - Dot-matrix printer
        
        best sales
    - - ink jet
      - laser printer
        
        highest prices and margins
        
        fastest growing
      - Epson launched EPL-6000
        
        very competitively priced laser printer
        
        HP launched LaserJet IIP
        
        priced significantly below EPL-6000
        
        Epson reduced price of EPL-6000
        
        successfully build up 5% share of laser print
        
        price competition hurt both HP and EPSON
        
        EPSON's mistakes
        
        treating LP game as separate from DMP game
        
        1 more item...
        
        misunderstood the scope of printer game
        
        1 more item...
- - - - provides a systematic way to develop strategies
      - Problems in the past
        
        academics vs. businesspeople
        
        equations vs. experience
        
        unrealistic
        
        example
        
        Its All in the Card
        
        Game 1
        
        Adam keeps 26 black card and distributes the 26 red cards to his students.(one black card with one red card value 100)
        
        turns in a pair of cards
        
        1 more item...
        
        free-form negotiation
        
        bargaining separately
        
        Game 2
        
        Barry plays the game with 23 black cards and distributes the 26 red cards to his students.(one black card with one red card value 100)
        
        holding out is a bad idea,because when the player refuse the 20 dollars Barry offers, he will not come back
        
        1 more item...
      - analyzes situations in which people’s fortunes are interdependent
- - - - when another player can take you down with him, you care about his retionality
- - - - This principle applies to any game with a specified sequence of possible moves and countermoves.