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Applying Game Theory to Strategy |
Prior to engaging in this discussion, please read Chapter 16 in the text and review any relevant Instructor Guidance. It is suggested that you review the recommended articles to glean any helpful information. Imagine that you own a pharmacy in your area. One of your competitors launches a “We will not be undersold” campaign, which promises consumers 150 % of any difference between its prices and the advertised prices of other pharmacies. Evaluate the social issues in your community as well as the economic culture that is influencing this type of pricing competition. Develop and describe a microeconomic model that is responsive to the service demands of your market. Based on your conclusions, how would you react to this situation and with what business strategy would you approach this? How might you apply game theory to the creation of your strategy?

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Running Head: APPLYING GAME THEORY TO STRATEGY
Applying game theory to strategy
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APPLYING GAME THEORY TO STRATEGY
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There are various social issues which have an impact on the differentiation in pricing, say, in
the case of the pharmacy having a difference of 150% with the other prices advertised by the
other pharmacies. On this note, the social issues may include the age of the people visiting the
pharmacies. People who are in their middle and older ages can easily afford the medication with
a 150% difference while the younger people may not be able to keep ...
