Suppose the game’s outcome is lousy…

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Presentation transcript:

Suppose the game’s outcome is lousy… What can you do?

New Cleaners & Fast Cleaners Redux Accommodate $100,000 to New Cleaners $100,000 to Fast Cleaners Fast Cleaners Enter Price War $-200,000 to New Cleaners -$100,000 to Fast Cleaners Newcleaners $0 to New Cleaners Keep Out Fast Cleaners has a problem….they want to keep New Cleaners out of the market, but no credible tactics to use. 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” Game of Chicken 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/ Price Wars and Price Match Guarantees 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 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.

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.

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.