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

2. 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.

3. 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.

4. 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.

5. 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
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.

6. 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.

7. 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.

8. 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.

9. 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.

10. 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.

11. 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.

12. 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.

13. 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.