Course material – Tuesday:

Backwards Induction: Bargaining and Contracts

Reading 

1.  Lecture 2

(PPT without inserts)

 

2.  AIG Unit Feels Effects of Pay Limits (WSJ, 03/29/2010)

Games Played in Class

1.   Airline Pricing

2.   Industrial  Dispute

3.   Industrial Dispute – Strategic Form

4.   Alliance

5.   Walmart and Kmart Game

6.   Alternating Offers Bargaining Game – Probability to Continue = 0.7

7.   Three Round Bargaining Game – Random Assignment

8.   Bargaining with Uncertainty

9.   Service Provider – Uniform Price

10.Service Provider – Fee and Units

11.Service Provider – Fee and Rate

12.Employment Contract

13.Outsourcing

14.Sales Commission