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Chapter 7 Game Theory and the Tools of Strategic Business Analysis.

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Presentation on theme: "Chapter 7 Game Theory and the Tools of Strategic Business Analysis."— Presentation transcript:

1 Chapter 7 Game Theory and the Tools of Strategic Business Analysis

2 Copyright © 2001 Addison Wesley LongmanSlide 7- 2 Figure 7.1(a) Game Tree Diagram for a Game of Perfect Information

3 Copyright © 2001 Addison Wesley LongmanSlide 7- 3 Figure 7.1(b) Game Tree Diagram for a Game of Perfect Information

4 Copyright © 2001 Addison Wesley LongmanSlide 7- 4 Figure 7.2 Extensive Form of the Game of Matching Pennies

5 Copyright © 2001 Addison Wesley LongmanSlide 7- 5 Figure 7.3 The Gift of the Magi Game

6 Copyright © 2001 Addison Wesley LongmanSlide 7- 6 Figure 7.4 The Isaac-Abraham Game

7 Copyright © 2001 Addison Wesley LongmanSlide 7- 7 Figure 7.5 Extensive Form of the Game Played in the Schotter, Weigelt, and Wilson Experiment

8 Copyright © 2001 Addison Wesley LongmanSlide 7- 8 Figure 7.6(a) Choices in the First Period

9 Copyright © 2001 Addison Wesley LongmanSlide 7- 9 Figure 7.6(b) Choices in the First Period

10 Copyright © 2001 Addison Wesley LongmanSlide Figure 7.7 Credible Threats in the Extensive Form of a Game

11 Copyright © 2001 Addison Wesley LongmanSlide Figure 7.8 Backward Induction

12 Copyright © 2001 Addison Wesley LongmanSlide Figure 7.9 Uniform Probability Distribution Defined over the Interval [0,200]

13 Copyright © 2001 Addison Wesley LongmanSlide Figure 7.10 Expected Value of a Wage Greater Than Reservation Wage (w*) over Interval [0, 200] Is Equal to (w* + 200)/2


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