List of games in Chapter 10 Complete Information

Using Comlabgames

 

Game title

(right click on the game to download it)

Short description of the experiment

Game 10.1: Industrial dispute in the extensive form

This is a game between a coal company and the union. The most recent major dispute has been at the company's major mine which is a 5.5 million ton per year operation with approximately 550 employees. The union has been seeking to achieve a collective agreement at the mine for almost two years. However, the company has not been interested in a collective agreement. After almost two years of bargaining, the company started to offer individual employment contracts which included a pay rise of around 5%. It hoped that workers who were frustrated with the lack of a pay rise in two years would take up on the offer. The offer requires the individual to give up their right to be represented by the union in negotiations over pay and working conditions, and to work as directed by the company all the times. Company believed it would win 10% of the workforce to non-union individual contracts immediately, and then the majority of the workforce within a few weeks. The union had a choice to ignore the company's action with respect to individual contracts or to initiate a strike to achieve a collective agreement quickly and to stop gradual defections from the union. Under Australian industrial law the union is allowed to strike indefinitely (and the company to lock out workers) during collective bargaining. The union sustained the striking workforce through the payment of strike pay which was financed by a levy of US$7 per week on all other members in the coal mining industry. The workers returned to work after the company agreed to a set of intensive bargaining talks. While precise levels of utility are hard to caculate for these kinds of scenarios, it is relatively straightforward to infer what the rankings of orderings of the payoffs,

Game 10.2: Industrial dispute in the strategic form

Game 10.3: Vertical integration original game

The second player has the opportunity to move at the same time as the first but also retains an option to wait and see. For example a component supplier for a manufacturer that assembles parts can scale of a run versus the inventory costs easier to mark the part on a long run rather than produce supply on a short notice.

Game 10.4: Vertical integration reduced game

Game 10.5: Vertical integration in the strategic form

Game 10.6: Strategic alliance in the extensive form

The cooperation between companies may take on a more formal character, or alternatively might be based on informal understanding that is not fully articulated in any written agreement. The game models a large company approaching a smaller company seeking to capitalize on its joint activities. The advantage of an informal partnership is its flexibility that provides both companies with opportunities to increase profit. By way of comparison companies sometimes see the mutual value from coordinating their activities without directly forming a partnership. Sometimes a second mover has partial information about what a previous player has chosen.

Game 10.7: Strategic alliance in the strategic form

Game 10.8: Investment broker in the extensive form game

There are two players in this game, a client and a broker. The client of an investment firm does not know how much attention her broker pays to anticipating changes in future returns to tech stocks versus industrials. At the initial node the broker chooses which type of stock he will follow most closely. Then nature reveals to his client whether the fluctuations in the economy are indicative of radical shift in technology or merely a prospect that ultimately was not realized. Since she follows business news herself the client is savvier than most investors, and thus has the opportunity to liquidate her position before the ramifications of the shock are apparent to everybody. At this point nature could have another turn with probabilities that techs versus industrials do well, and then the payoffs could be realized.

Game 10.9: Investment broker in the strategic form game

Game 10.10: Manufacturing aircraft in the extensive form

There are four pure strategies open to each player. The engine manufacturer could bribe the Thai government and then locate in either country, or alternatively decide against bribing Thailand and locate one of the two countries. The airframe manufacturer could make a location decision that is independent of whether Thailand is bribed or not, it could locate in Malaysia if and only if the Thais are not bribed, or it might choose to locate in Malaysia if and only if the Thais are bribed.

Game 10.11: Manufacturing aircraft in the strategic form