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[CO] Chapter 3 – Game Theory, game&game, now& future, 價格 (印表機種類),…
[CO] Chapter 3 – Game Theory
The Game Theory+Added value
Basic idea of Game Theory
All in the card.
Card Game
who turns in a pair of cards, one black and one red.
Get 100$
free-form negotiation between teacher and students.
students can't group up,
they have to bargain on an individual basis.
Card game 1
Adam
with 26 students
Adam
26
red card
Student each have one black card.
Card game 2
Barry
with 26 students
Barry with
23
red card.
Student each have one black card.
Smaller pie
Take the $20 offer
Added value
YOUR ADDED VALUE =
The size of the pie when you are in the game ➖
The size of the pie when you are out of the game
Who has power in the game?
What U can get is limited by what U bring.
Adam's
Game
$5600
Adam’s $2,600
plus $100 from each of the twenty-six students.
Barry's
Game
$2,300
Barry's $2,300
Student's $0
The Common Error
1️⃣ look at only half of the equation.
Without Adam there is no game
1 more item...
To calculate your added value
1 more item...
2️⃣ confuse your individual added value
with the larger added value of a group of people in the same position as you.
Barry's game student think they have power.
1 more item...
The added value of car is huge
1 more item...
Adam's students.
most likely end up with
50/50
Student need Adam as much as Adam need student.
Student can reject the deal.
Barry's students.
Their will be 3 student can't be match.
a game of musical chair
Students need Barry more than Barry need students.
take the deal even the price low than $20
Barry could even propose a
90/10
split.
Who have the power?
Rules
in general
business negotiations usually have
rules
value can be
priced by either sellers or buyers
sellers' market
e.g. supermarket post price on their products
buyers' market
e.g. employers specify the terms and salary in job market
false :red_cross:
free-form
included contracts, custom, laws
principles
basis
take-it-or-leave-it
accept v.s. reject (no counteroffer)
ultimatum game
put yourself in other's shoes
ideal situation: distributed evenly
the best result: well-distributed with sufficient resources
Perceptions
Negotiation
Dividing up a pie
Texas Shoot-Out
Probability
50%
The kid’s version
Value the pie differently
The crust
Probabilities
50%
More slices by giving the crust part to the other
Encourage your partner to shoot first
Choices of buy or sell.
Negotiating a Director's Fee in Filmmaking
Writer proposes himself as the replacement director, backed by the star's approval.
Agent vs. lawyer
$250,000.
750,000
The scope of the
game
Boundaries
(Scope)
Game has
no
boundaries. (in principle)
Real world is too complex to know.
Ppl. draw boundaries in mind to help analyzing.
real boundary
≠
mental boundary
:star:
link
Analyzing individual games isolatedly is treacherous.
Story
Which step went wrong :question:
Failed to see cascade effect (link) & the larger game.
The Paradox of Rationality in Games
The multiple perspectives of game theory
Allocentrism
Added values
Access how valuable you are to them.
Rules
Anticipate reactions to your actions.
Perceptions
Understanding how they see the game.
Understanding empathetically
Rationality in game theory
All the players are rational
:red_cross:
Perceiving the game differently
Behavioral economics
Players are almost ego-centrical .
The Elements of a Game
:star:
PARTS
:star:
Understanding what's going on in any game.
P
layers
Fundamental elements
A
dd values
R
ules
T
actics
S
cope
The boundaries to define game.
The devices used to shape perceptions
The structures the game is played
Who get power and who get big payoff.
game&game
now& future
價格
印表機種類
人
Epson
HP
ink-jet
650/per
laser
:red_flag:2200/per
dot-matrix
500/per
highest price&margin
Epson：EPL-6000
HP： LaserJet IIP(lower price)
price competition
start
The most profitable products
no longer profitable.
HP sell ink-jet printers instead,
caused the competition within two products with similar prices(dot-matrix &ink-jet) get fierce.
There is no way to lower the price of Dot-matrix printers anymore.
Epson lost his second business.
more and more competitors join the price war
Epson lost his first business.
IPCM3 Mos
IBS M1 Eric
DFLL4 Becky
IBS3 Avery
DSES 3 Dora