Tugas Ekonomi Manajerial

(Chapter 10- Game theory)

Oleh :

Radityo Kusumo ( 1006831000)

Riandhika Hikmatiar ( 1006831452)
Rini Masjhudi ( 1006831521)
Tya Rachmawati ( 1006831843)
Sutiarsih ( 1006831780)

PROGRAM MAGISTER MANAJEMEN

FAKULTAS EKONOMI UNIVERSITAS INDONESIA

SALEMBA
2011
1. a. Strategy dominan Player 1 adalah strategy B, karena player 1 dengan strategy B akan
mendapatkan revenue yang lebih besar walaupun player 2 menggunakan strategy D,E,
F. Sedangkan player 2 tidak mempunyai strategi dominan, karena setiap strategy yang
digunakan oleh player 2 akan mempunyai revenue yang di bawah player 1
b. Secure strategy player 1 adalah strategy B, karena dengan mempertimbangkan
skenario yang terburuk, dimana pada strategy B didapatkan hasil yang tertinggi dan
maksimal. Sedangkan secure strategy player 2 adalah strategy E, dimana pada strategy
E player 2 mendapatkan hasil yang maksimal dan tertinggi jika menurut skenario
yang terburuk.
c. Nash Equilibrium dari player 1 dan player 2 adalah Strategy B untuk Player 1 dan
strategy E untuk player 2

2. a. Player 2
Strategy A B
Player 1 A $500, $500 $0, $650
B $650,0 $100,$100

b. B is dominant for each player.

c. Player 1 = Strategy B menjadi dominant strategy
Player 2 = Strategy B menjadi dominant strategy
d. Joint payoffs from (A, A) > joint payoffs from (A, B) = joint payoffs from (B, A) >
joint payoffs from (B, B).
e. The highest aggregate payoff cannot be sustainedin equilibrium because the dominant
strategy of each player is B. Therefore, since this is a one-shot game, each player
would have an incentive to cheat on any collusive arrangement.

3. a. Optimal strategi untuk pemain 1 adalah B, karena pemain satu sebenarnya tidak
memiliki strategi dominan, sehingga ketika pemain 2 memilih D yang mana D adalah
merupakan strategi dominan dari pemain 2, pemain 1 dapat mengantisipasinya dengan
menempatkan dirinya pada sudut pandang pemain 2. Jadi, respon terbaik yang
dimiliki oleh pemain 1 jika pemain 2 memilih D adalah dengan memilih B.
b. equilibrium payoff untuk pemain 1 adalah 5.
4. Use the following normal-form game :
Player Player 1
Strategy C D
Player 2 A 10,10 60,-5
B -5,60 50,50

a. The one-shot Nash Equilibrium is strategies A and C with payout 10,10.

b. Suppose the players know this game will be repeated exactly three times. Can they
achieve payoffs that are better than the one-shot Nash equilibrium?
 No, they can’t achieve payoffs that better than the one-shot Nash equilibrium,
because the best alternatives payoffs that can they achieve no matter the game
will be repeated thee times is 10,10 that used strategies A and C.
c. Suppose this game is infinitely repeated and the interest rate is 5%. Can the players
achieve payoffs that are better than one-shot Nash equilibrium?explain.
 The players can achieve payoffs that are better than one-shot Nash equilibrium
if they use trigger strategies. Sustaining cooperative outcomes with trigger
strategies can be earned if :
π cheat – π coop ≤ 1
π coop – π N i
in this problem, we know that :
π cheat : 60 , π coop : 50 , π N : 10 , i : 5%

So, (60-50) / (50-10) = 10/40 =0,25

0,25 ≤ (1/5%)
0,25 ≤ 20, this mean that the players can achieve payoffs that are better than
one-shot Nash equilibrium if they use trigger strategies B and D with payoffs
50,50.
d. Suppose the players do not know exactly how many times this game will be repeated,
but they do know that the probability the game will end after a given play is Ө, if Ө is
sufficient low, can players earn more than they could in the one-shot Nash
equilibrium.
  Because the players know the probability that the game game will end after a
given play is low, so players can achieve more than they earn ini the one-shot
nash equilibrium.

5. Use the following normal-form game to answer the questions below.

a) For what values of x is strategy D (strictly) dominant for player 2?
x>2
b) For what values of x is strategy B (strictly) dominant for player 1?
x<2
c) For what values of x is (B, D) the only Nash equilibrium of the game?
x<2

6. Consider a two-player, sequential-move game where each player can choose to play right
or left. Player 1 moves first. Player 2 observes player 1’s actual move and then decide to
move right or left. If player 1 moves right, player 1 receives $0 and player 2 receives
$15. If both players move left, player 1 receives -$10 and player 2 receives $8. If player 1
moves left and player 2 moves right, player 1 receives $10 and player 2 receives $10.
a) Write the above game in extensive form.

b) Find the Nash equilibrium outcomes to this game.

($0,$15) and ($10,$10).
c) Which of the equilibrium outcomes is most reasonable? Explain.
($10, $10) is the only subgame perfect equilibrium; the only reason ($0, $15) is
a Nash equilibrium is because Player 2 threatens to play left if 1 plays left. This threat
isn’t credible.
7. Use this following extensive-form game :

W 60,120

A 50,50
X
2
X
1 Y
0,0
B 2
Z 100,150

a. Feasible strategies for player 1 and player 2 are :

- Player 2 choose W if player 1 choose A and Player 2 choose Y if player 1
choose B
- Player 2 choose X if player 1 choose A and Player 2 choose Z if player 1 choose
B
- Player 2 choose W if player 1 choose A and Player 2 choose Z if player 1
choose B
- Player 2 choose X if player 1 choose A and Player 2 choose Y if player 1
choose B

b. The Nash equilibrium to this game are strategy W (60,120) and Z (100,150)
c. Subgame perfect equilibrium is Z (100,150)

8. a. dari tabel pada soal, terdapat 2 nash equilibrium, yaitu 5,5 dan 20,20.
b. pemain satu harus memainkan strategi B. Ini akan menjadi signal bagi pemain 2
bahwa pemain 1 akan menggunakan strategi B, oleh karenanya dapat
memperkenankan kedua pemain untuk berkoordinasi pada 20,20.
c. pemain 2 akan memilih Y dan pemain 1 akan memilih B.

9. Player 2
Strategy C D
Player 1 A -100, -100 150, -80
B -50, 180 100, 150
 a. Player 1  dominant strategy = A (150, -80)
Player 2  dominant strategy = C (-50, 180)

b. Player 1  secure strategy = A (-100, -100)

Player 2  secure strategy = C (-100, -100)

c. Nash equilibrium in this game is (A,C)

10. Trigger strategy agar player 1 dan player 2 dapat mendapatkan hasil 100 dan 150 adalah
ketika terjadi tindakan ketika player 1 menggunakan strategy A dan player 2
menggunakan c, dan kemudian player 1 melakukan low price dengan tetap menggunakan
strategi A sehingga mendapatkan payoff 150 dan player 2 menggunakan strategy D
untuk meminimalkan kerugian, kemudian player 2 melakukan low price dengan
menggunakan strategi c dan mendapatkan payoff 180 dan player 1 menggunakan
strategy B untuk meminimalisir kerugian menjadi -50, kemudian player 1 dan player 2
melakukan kesepakatan untuk mencapai hasil yang equilibrium dengan player 1
menggunakan strategy B dan player 2 menggunakan strategy D.

11.
KMART
Strategy Sales Price Regular Price
Target

Sales Price $ 1,$ 1 $5, $3

Regular Price $3, $5 $3, $3

Jika melihat tabel pricing game di atas, terdapat dua buah nash equilibrium yaitu (sales
price, regular price) dan (regular price, dan sales price) dengan keuntungan yang
dihasilkan ($5, $3), dan ($3, $5). Jika melihat tabel pricing game tersebut tidak ada cut
pricing strategy yang jelas antar kedua perusahaan. sehingga langkah yang dilakukan
untuk mengatasi permasalahan tersebut adalah dengan melakukan kegiatan promosi
setiap minggu. Langkah lainnya adalah dengan melakukan garansi seperti “everyday low
prices” dengan demikian akan selalu melakukan komitmen agar menetapkan sales price.
Dalam kasus demikian diharapkan Target akan melakukan respon yang terbaik dengan
 menetapkan strategy regular pricing dan perusahaan mendapatkan keuntungan sebesar $5
million.

12. Honda
Strategy Air Bags No Air bags
Toyota Air Bags $1.5, $1.5 $2, - $1
No Air bags -$1, $ 2 $0.5, $0.5

The dominant strategy, in this case, would be to offer airbags.

If I am a decision maker at Honda, I would make side-impact airbags standard
equipment because it can earn a profit $2billion, it is a chance to boost company profit.
If I do not take this chance so Toyota will take it.

13.

Not
Introduce $200, $300

Price

war $100,$100
Pepsi

Introduce
Coca Cola

Acquiesce
$227, $275

Respon terbaik yang akan dilakuan coca cola jika Pepsi memutuskan untuk
memperkenalkan produk baru adalah dengan menyetujui untuk mendapatkan
keuntungan sebesar $275.000.000 dari pada harus terlibat dalam perang harga dan
hanya mendapatkan keuntungan $100. Namun, jika coca cola tetap memutuskan untuk
melakukan perang harga sebagai usahanya untuk menendang pepsi keluar dari pasar,
ancaman tersebut tidak akan mungkin dilakukan oleh coca cola. Sehingga keputusan
terbaik bagi pepsi adalah dengan tetap memperkenalkan produk barunya.
14. Suppose a UAW labor contract with General Dynamics is being renegotiated. Some of
the many issues on the table include job security, health benefits, and wages. If you are
an executive in charge of human resource issues at General Dynamics, would you
better off (a) letting the union bear the expense of crafting a document summarizing its
desired compensation or (b) making the union a take-it-or-leave-it offer? Explain.
 If an executive in charge of human resource issues at General Dynamics letting the
union bear the expense of crafting a document summarizing the labor desired
compensation, the gain is more small than making the union a take-it-or-leave-it
offer. So, better alternative choice is making the union a take-it-or-leave-it offer.

15. You are the manager of a firm that manufactures front and rear windshields for the
automobile industry. Due to economies of scale in the industry, entry by new firms is not
profitable. Toyota has asked your company and your only rival to simultaneously submit
a price quote for supplying 100,000 front and rear windshields for its new Highlander. If
both you and your rival submit a low price, each firm supplies 50,000 front and rear
windshields and earns a zero profit. If one firm quotes a low price and the other a high
price, the low-price firm supplies 100,000 front and rear windshields and earns a profit of
$9 million and the high-price firm supplies no windshields and loses $1 million. If both
firms quote a high price, each firm supplies 50,000 front and rear windshields and earns
a $7 million profit. Determine your optimal pricing strategy if you and your rival believe
that the new Highlander is a “special edition” that will be sold only for one year. Would
your answer differ if you and your rival were required to resubmit price quotes year after
year and if, in any given year, there was a 50 percent chance that Toyota would
discontinue the Highlander? Explain.
Answer:
The optimal pricing strategy is to quote a low price because:
 If you quote high price, order may go to a rival and you may loose $1 million.
 If both quotes high price, then you may earn $ 7 million.
 If you quote low price, then you may earn $ 9 million.
 If both quotes low price, then you may not earn anything
Assuming that it is a one-time order, the strategy should be provide a low price, so that
you will either earn $ 9 million or you earn nothing. Had it not been a one time order,
 then the pricing straegy should be different as even if you take a hit on your profit for the
initial year you may benefit in the future.
If the quote, is required year after year, then every year the pricing strategy has to be
different depending upon the prevailing market conditions and watching the rival in the
previous year.

17. The firms use trigger strategies to support the collusive level of advertising if,
π cheat – π coop ≤ 1
π coop – π N i
In this problem, we know that :
π cheat : 48 , π coop : 8 , π N : 0

So, (48-8) / (8-0) = 40/8 = 5 ≤ (1/ i %),

5 ≤ (1/ i %), i ≤ 20%

From this equation we can conclude that the firms use trigger strategies to support the
collusive level of advertising if i ≤ 20% .

18. normal form of this game:

Baker

Argyle Price $10 $20

$5 15,16 15,18

$10 10,16 10,18

Harga optimal untuk argyle adalah sebesar $5. Jika saya menjadi manager dari Argyle
Inc, saya tidak akan meninvestasikan dama sebesar $2 million, karena kemampuan
untuk menjadi first mover tidak akan memberikan keuntungan pada gaji karyawan
yang harus dibayarkan.
19.
 Direct labor and direct materials are are variable costs (relevant cost)
 Depreciation is a fixed (or sunk) cost ( irrelevant cost)
Fixed cost (250 units)= $80 x 250 = $20000, (500 units)= $40 x 500= $20000
$80 & $40 = fixed cost
 Since depreciation is a fixed cost and must be paid regardless of the firm’s output, it is
irrelevant to the decision.
 The firm’s marginal cost (which equals its average variable cost in this case) is thus
the sum of unit labor and materials costs  $40 + $30 = $70.
 The payoff matrix (normal form) below shows the relevant payoffs (contributions)
towards paying the $20,000 in fixed costs for alternative levels of output by the two
firms.
 The key is to note that if each firm produces 250 units, total market output is 500 units
and the price is $120
 Each firm’s contributions in this case are ($120 - $70) x 250 = $12500
 If one firm produces 250 units and the other firm produces 500 units,the market price
is $100. In this case, the firm’s contributions are ($100 - $70) x 250= $7500 and
($100 - $70) x 500 = $15000.
 If each firm produces 500 units, the market price is $90, and the contributions of each
firm are ($90 - $70) x 500 =$10000.
 The payoff matrix (normal form) below shows the relevant contributions toward
paying the fixed costs of $20,000.
Net Works
Strategy 250 units 500 units
GearNet 250 units $12500, $12.500 $7500, $15000
500 units $15000, $7500 $10000, $10000

 Each firm’s dominant strategy in a one-shot game is to produce 500 units. In

equilibrium , each firm contributes $10,000 toward its $20,000 in fixed costs.
20. Normal Form of this game:

T-Mobile

Qualcomm Strategies CDMA GSM

CDMA $ 16b, $ 12b $ 12b, $ 8b

GSM $ 14b, $ 7b $ 13b, $ 18b

Pada game terdapat dua nash eguilibrium, yaitu:

1. Apabila Qualcomm dan T-Mobile adopt CDMA

2. Apabila Qualcomm dan T-Mobile adopt GSM
Cara yang dapat dilakukan untuk mengatasi adanya keragaman dalam nash equilibrium
ini salah satunya adalah dengan cara masing-masing perusahaan saling berunding dan
sepakat pada satu teknologi saja, baik CDMA maupun GSM saja

21. Normal form of this game:

JAPAN

US Strategies Tariff No Tariff

Tariff $43.78, $4.76 $44.2, $4.66

No Tariff $43.66, $4.85 $44, $4.8

Dalam soal ini, Nash equilibrium akan tercapai apabila baik US maupun Japan menetapkan tarif.
Akan tetapi, kedua negara tersebut akan mencapai tingkat kesejahteraan yang lebih tinggi dengan
menyepakati untuk tidak menentukan tarif tertentu. Kelanjutan dari kesepakatan untuk tidak
menetapkan tarif tergantung pada adanya pengulangn permainan.
22. An office manager is concerned with declining productivity. Despite the fact that she
regularly monitors her clerical staff four times each day – at 9 am, 11 am, 1 pm, and 3
pm – office productivity has declined 30% since she assumed the helm one year ago.
Would you recommend that the office manager invest more time monitoring the
productivity of her clerical staff? Explain.
 In this situation, the best strategies that the office manager can do is not invest more
time monitoring the productivity of her clerical staff, but can use mixed
(randomized) strategy. This mean that the office manager “randomize” over her
available strategies. Despite the fact that she regularly monitors her clerical staff
four times each day – at 9 am, 11 am, 1 pm, and 3 pm – now, she can do that
monitors her clerical staff in random. By doing so, her clerical staff cannot predict
whether the office manager will be present to monitoring her and consequently
cannot outguess the office manager. With this new strategies the office manager
hope that the productifity of the worker is higher than before and achieve higher
productivity than before.

23. You manage a company that competes in an industry that is compromised of five equal-
sized firms. A recent industry report indicates that a tariff on foreign imports would
boost industry profits by $ 30 million-and that it would only take $5 million in
expenditures on (legal) lobbying activities to induce Congress to implement such a tariff.
Discuss your strategy for improving your company's profits.
Answer:
The tariff will increase each firm's profits by $6 million ($30million/ 5 firms). Optimally,
you could compromise to split the $5 million in expenditure between the 5 firms ($1
million each) and each firm would have a net increase in profits of $5 million. If the
other firms are uncooperative, even if your firm paid all of the $5 million in expenditures
you would still have a net increase in profits of $1 million.