Game Theory in Negotiation

What is the type of game where you have to work with others to win?

• Zero-sum game

• Randomness game

• Discrete game

• Cooperative game

What type of game makes you and your opponent make the same move

• Cooperative

• Symmetrical

• Discrete

• Continuous

In the 1990s, Coca-Cola and Pepsi engaged in a fierce price war, with each company lowering their prices in an attempt to gain market share. Both companies knew that if they cooperated and kept prices high, they would both earn more profit. However, if one company lowered their prices, the other would be forced to do the same in order to stay competitive, leading to a decrease in profit for both companies.

What type of game best represents their situation?

• Chicken

• Deer Hunt

• Prisoner's Dilemma

• Price dumping war

Coca-Cola & Pepsi

If both keep prices high, profits for each company increase by $500 million (because of normal growth in demand).

If one drops prices (i.e. defects) but the other does not (cooperates), profits increase by $750 million for the former because of greater market share, and are unchanged for the latter.

If both companies reduce prices, the increase in soft drink consumption offsets the lower price, and profits for each company increase by $250 million.

Choose the options that will make Coca-Cola win $750 million.

• Coca-Cola Cooperates

• PepsiCo

  Cooperates

• Coca-Cola

  Defects

• PepsiCo

  Defects

Your boss asks all the staff, including you, to agree or disagree to increase all of your salaries. However, if more than 50% of the staff agrees (to increase your salaries), he will fire those who disagreed to be able to pay for the increase.

If more than 50% staffs disagree, then boss will not increase salaries or fire anyone.

How would you vote?

• 
• 

What type of game involves two players making simultaneous decisions?

• Cooperative game

• Symmetrical game

• Sequential game

• Continuous game

When both players in a game choose to cooperate, what is the outcome?

• Both players win

• One player wins, one loses

• Both players lose

• Outcome is random

You want to negotiate with your landlord for a lower rent for 3 months because you lost your job and you're looking for a new one. If you offer them a fair and reasonable amount, they are more likely to accept it, but if you offer them too little, they will likely reject it, and you’ll end up with nothing.

What type of game does this scenario represent?

• The Ultimatum game

• Prisoner's Dilemma

• The Nash Equilibrium

• Pirates game

You have to work on a project proposal with a partner you don't know because he/she is new to the company. Your boss asked you two and another team to do a proposal. The team that has the best one will become project leaders. You asked your boss if you can do the proposal on your own. She said that, because is a big project, you should do only one part of it and, therefore, you couldn't become project leader. Your boss also told you, your partner asked the same and got the same answer. What type of game is this scenario?

• The Deer Hunt Game.

• The Pirate Game

• The Prisoner's Dilemma

• The Hunger Game

You have to work on a project proposal with a partner you don't know because he/she is new to the company. Your boss asked you two and another team to do a proposal. The team that has the best one will become project leaders. You asked your boss if you can do the proposal on your own. She said that, because is a big project, you should do only one part of it and, therefore, you couldn't become project leader. Your boss also told you, your partner asked the same and got the same answer.

What should your strategy be??

• Ask your boss for a different partner
• Collaborate with the new partner to create the best proposal together.
• Sabotage the other team's proposal
• Ignore the project and focus on other tasks