Overview
Part 1 — Discussion Questions (30 points each)
Post a substantive initial response of 250–300 words to both questions below by the mid-week deadline, then
reply to at least two classmates with meaningful, evidence-based comments by the end of the week. Support
your claims with the textbook and at least one credible outside source, cited in APA format.
Discussion Question 13 — Strategic Games
Identify a real rivalry between two firms that behaves like a prisoner's dilemma — for example, competing on
price, advertising spend, or capacity expansion. Sketch a simple 2×2 payoff matrix for the two firms, label the
strategies (e.g., “Compete” vs. “Cooperate”), and identify each firm's dominant strategy and the Nash
equilibrium. Explain why both firms can end up worse off than if they had cooperated, and discuss at least one
realistic mechanism (repeated interaction, reputation, a credible commitment, or an industry norm) that could
help them sustain the cooperative outcome without violating antitrust law.
Discussion Question 14 — Bargaining
Describe a negotiation you have participated in or closely observed (professional, commercial, or personal).
Identify each side's BATNA (best alternative to a negotiated agreement) and threat point, and explain how the
“pie” — the total gains from reaching a deal — was ultimately divided. Analyze which party held the stronger
bargaining position and why, and recommend two specific steps the weaker party could have taken to improve
its outcome. Connect your analysis explicitly to the bargaining concepts in Chapter 16.
Part 2 — Written Assignment: Strategic Analysis Memo (25 points)
Prepare a professional business memorandum of 3–4 pages (double-spaced, excluding title and reference
pages) in which you analyze a strategic interaction and a bargaining situation faced by a real company or
industry of your choice.
Scenario
Select a company or industry currently facing strategic competition (for example: streaming services, ride-
sharing platforms, airlines, smartphone makers, or fast-food chains). You will act as a strategy analyst advising
the firm's leadership.
Required Components
1. Situation. Briefly describe the firm, its main rival(s), and the strategic decision at stake (e.g., pricing,
entry, capacity, or advertising).
2. Game-theoretic analysis. Construct a 2×2 payoff matrix representing the interaction. Identify dominant
strategies, the Nash equilibrium, and whether the situation is a prisoner's dilemma. State your
assumptions about the payoffs.
3. Sequential and commitment considerations. Discuss whether first-mover advantage or a credible
commitment (capacity, contracts, reputation) would change the outcome, and how.
4. Bargaining analysis. Identify a related negotiation the firm faces (with a supplier, partner, union, or
customer). Specify the parties' BATNAs and threat points and explain how the gains would likely be split.
5. Recommendation. Provide a clear, actionable recommendation to strengthen the firm's strategic and
bargaining position, grounded in your analysis.