Podcast
Questions and Answers
Ryanair was founded in 1985 as a low-cost domestic airline in the United States.
Ryanair was founded in 1985 as a low-cost domestic airline in the United States.
False (B)
The winning strategy of the repeated prisoner's dilemma tournament was called 'Tit for Kuk'.
The winning strategy of the repeated prisoner's dilemma tournament was called 'Tit for Kuk'.
False (B)
In an oligopoly, competing companies may engage in collusion to keep prices high.
In an oligopoly, competing companies may engage in collusion to keep prices high.
True (A)
The judo strategy suggests moving head-on against a stronger opponent to win a conflict.
The judo strategy suggests moving head-on against a stronger opponent to win a conflict.
Overfishing occurs when fishermen collaborate to limit their catch sustainably.
Overfishing occurs when fishermen collaborate to limit their catch sustainably.
The Prisoner’s Dilemma highlights the conflict between personal gain and mutual benefit.
The Prisoner’s Dilemma highlights the conflict between personal gain and mutual benefit.
In political campaigns, running positive campaigns typically guarantees a higher chance of winning.
In political campaigns, running positive campaigns typically guarantees a higher chance of winning.
The Cold War's arms race was characterized by a mutual distrust between the U.S. and Soviet Union.
The Cold War's arms race was characterized by a mutual distrust between the U.S. and Soviet Union.
Flashcards
Prisoner's Dilemma
Prisoner's Dilemma
A situation where two parties must choose between cooperating or betraying, without knowing the other's choice. Both parties benefit from cooperation, but betrayal leads to potentially higher gains for one while possibly hurting the other, creating a conflict of interest.
Tit for Tat
Tit for Tat
A strategy for playing the Prisoner's Dilemma where you cooperate on the first move and then mirror your opponent's previous move. This fosters cooperation and punishes betrayal.
Judo Strategy
Judo Strategy
A strategic approach where a weaker competitor avoids direct conflict by quickly moving to uncontested areas, adapting to pressure, and using the opponent's strength against them.
Corporate Collusion
Corporate Collusion
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Tragedy of the Commons
Tragedy of the Commons
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Competition in Business
Competition in Business
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Arms Race
Arms Race
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Negative Political Campaigns
Negative Political Campaigns
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Study Notes
Southwest Airlines and Ryanair
- Southwest Airlines was the first low-cost airline, founded in 1967.
- Ryanair, founded in 1985, was a European low-cost airline aiming for minimal costs.
Prisoner's Dilemma
- A game theory concept where two parties must choose between cooperation and betrayal.
- Uncertainty about the other's choice creates tension.
- Relevant in business when firms, competitors, or partners make decisions.
Cooperation vs. Competition
- Price competition: Coke vs. Pepsi
- Advertising: McDonald's vs. Burger King
- R&D/Innovation: Apple vs. Samsung
- Sustainability: Shell vs. BP
Strategic Decision-Making Example (Airlines)
- Ryanair can choose to enter the UK-Ireland route, potentially facing competition from Aer Lingus & British Airways.
- Or they can remain outside the market.
Repeated Prisoner's Dilemma Tournament
- A 1980s experiment by Robert Axelrod.
- Different strategies were tested in a repeated game.
- The winning strategy was "Tit for Tat" — cooperate first, then mirror the opponent's prior move.
- Reciprocity promotes cooperation.
Real-World Applications of Prisoner's Dilemma
- Arms Race (Cold War): US and Soviet Union's dilemma between nuclear arms build-up and disarmament. Lack of trust fuelled proliferation.
- Corporate Collusion: Companies might collude to raise prices. If one lowers prices, market share gains result.
- Overfishing: Fishermen mutually benefit from limiting catches, but overfishing occurs if some exceed limits.
- Political Campaigns: Candidates choose between positive campaigns or attacks. Mutual attacks alienate voters.
- Workplace Collaboration: Teamwork boosts productivity. Individual withholding of effort negatively impacts the whole team's performance.
Judo strategy
- A strategy to avoid direct confrontation.
- Move to uncontested areas.
- Yield to superior force when necessary.
- Utilize the opponent's strength against them.
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