OPEC Oil Cartel Iraq’s Output 2 4 Iran’s Output 46* / 42** 26* / 44** 46* / 42** 26* / 44** 52* / 22** 32* / 24** *Daily profit for Iran, **Daily profit for Iraq This slideshow was written by Ken Chapman, but is substantially based on concepts from Thinking Strategically by Avinash K. Dixit and Barry J. Nalebuff, W.W. Norton 1991.

Achieving Cooperation Detecting Cheating Punishing Cheating Punishment is Guaranteed Crazy Eddy’s Low Price Guarantee Tit-for-a-tat This slideshow was written by Ken Chapman, but is substantially based on concepts from Thinking Strategically by Avinash K. Dixit and Barry J. Nalebuff, W.W. Norton 1991.

Crazy Eddy vs. Newmark & Lewis Low Price High Price Price Guarantee Crazy Eddy 50* / 50** 150* / 10** 10* / 150** 75* / 75** *Profit for Crazy Eddy, **Profit for Newmark& Lewis This slideshow was written by Ken Chapman, but is substantially based on concepts from Thinking Strategically by Avinash K. Dixit and Barry J. Nalebuff, W.W. Norton 1991.

High Definition TV Japanese Effort Low High US Effort 4* / 3** 4* / 3** 2* / 4** 3* / 2** 1* / 1** *payoff for US, **payoff for Japan This slideshow was written by Ken Chapman, but is substantially based on concepts from Thinking Strategically by Avinash K. Dixit and Barry J. Nalebuff, W.W. Norton 1991.

Commitment And Credibility High effort 1*,1** Japan Low effort High effort 3*,2** US High effort 2*,4** The US may have to commit R&D funds to firms to make this credible. Low effort Japan Low effort 4*,3** *payoff for US, **payoff for Japan This slideshow was written by Ken Chapman, but is substantially based on concepts from Thinking Strategically by Avinash K. Dixit and Barry J. Nalebuff, W.W. Norton 1991.

Threats and Promises Threats Promises Warnings vs. Assurances “No dessert unless you eat your spinach…” Promises “Pay me now and I won’t hurt you…” Warnings vs. Assurances This slideshow was written by Ken Chapman, but is substantially based on concepts from Thinking Strategically by Avinash K. Dixit and Barry J. Nalebuff, W.W. Norton 1991.

The Cold War: Nuclear Deterrence Conventional 1*,-1** U.S. Start Land War Nuclear -100*,-100** Soviets No War 0*,0** *payoff for USSR, **payoff for US This slideshow was written by Ken Chapman, but is substantially based on concepts from Thinking Strategically by Avinash K. Dixit and Barry J. Nalebuff, W.W. Norton 1991.

Dr. Strangelove U.S. -100*,-100** Soviets 0*,0** Start Land War Nuclear -100*,-100** Soviets No War 0*,0** *payoff for USSR, **payoff for US This slideshow was written by Ken Chapman, but is substantially based on concepts from Thinking Strategically by Avinash K. Dixit and Barry J. Nalebuff, W.W. Norton 1991.

The eight-fold path to credibility Establish a reputation Write contracts Cut off communication Burn bridges behind you Leave the outcome to chance Move in small steps Develop credibility through teamwork Employ mandated negotiating agents This slideshow was written by Ken Chapman, but is substantially based on concepts from Thinking Strategically by Avinash K. Dixit and Barry J. Nalebuff, W.W. Norton 1991.

Reputation Israel’s refusal to deal with hijackers Tax amnesty & the US Congress Mayflower Furniture “127 years without a sale” This slideshow was written by Ken Chapman, but is substantially based on concepts from Thinking Strategically by Avinash K. Dixit and Barry J. Nalebuff, W.W. Norton 1991.

Contracts Agree to penalties if you don’t follow through Complications Nick Russo: “$25,000 to the charity of your choice if you catch me eating in a restaurant.” Renegotiation http://www.stickk.com/ For a contract to work, the party that enforces the contract must have some independent reason to do so. This slideshow was written by Ken Chapman, but is substantially based on concepts from Thinking Strategically by Avinash K. Dixit and Barry J. Nalebuff, W.W. Norton 1991.

Cutting Off Communication Death and Cecil Rhodes Suppose that universities insist on $1.5 million to endow a chair…can endow one for less? It took an act of parliament to let Rhodes scholarships be given to women because it was in his will. This slideshow was written by Ken Chapman, but is substantially based on concepts from Thinking Strategically by Avinash K. Dixit and Barry J. Nalebuff, W.W. Norton 1991.

Burning Bridges Cortez burned his own ships upon arrival in Cempoalla, Mexico Cortez’s soldiers new they could not retreat or desert, and his foes new that they would fight to the death. This slideshow was written by Ken Chapman, but is substantially based on concepts from Thinking Strategically by Avinash K. Dixit and Barry J. Nalebuff, W.W. Norton 1991.

Leaving the Outcome Beyond Your Control Dr. Strangelove This slideshow was written by Ken Chapman, but is substantially based on concepts from Thinking Strategically by Avinash K. Dixit and Barry J. Nalebuff, W.W. Norton 1991.

Moving in Steps Honor among thieves Event 1: A single million dollar transaction Event 2: A thousand transactions of $1000 No double crosses over small amounts…spit into small steps commitment is feasible This slideshow was written by Ken Chapman, but is substantially based on concepts from Thinking Strategically by Avinash K. Dixit and Barry J. Nalebuff, W.W. Norton 1991.

Teamwork Peer Pressure: Weight Watchers, AA Romans: Falling Behind was a capital offense for soldiers This slideshow was written by Ken Chapman, but is substantially based on concepts from Thinking Strategically by Avinash K. Dixit and Barry J. Nalebuff, W.W. Norton 1991.

Mandated Negotiating Agents A labor leader may have to deliver the gains he promised or lose his job This slideshow was written by Ken Chapman, but is substantially based on concepts from Thinking Strategically by Avinash K. Dixit and Barry J. Nalebuff, W.W. Norton 1991.