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26 Cards in this Set
- Front
- Back
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comparative advantage
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Superior efficiency on a relative basis
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competitive advantage
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Unique or rare ability to create, distribute, or service products valued by customers
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customer lock-in effect
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Benefit from establishing durable customer loyalty
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dominant strategy
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Decision that gives the best result for either party regardless of the action taken by the other
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end-of-game problem
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Difficulty tied to inability to punish or reward final-period behavior
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equilibrium outcome
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Payoff allocation that cannot be improved by unilateral action
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finitely repeated game
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Game that occurs only a limited number of times, or has limited duration in time
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first-mover advantage
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Benefit earned by the player able to make the initial move in a sequential move or multistage game
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game-theory strategy
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Game-theory plan of action designed to achieve a specific goal
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infinitely repeated game
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Game that is repeated over and over again without boundary or limit
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limit pricing
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Strategy to set less than monopoly prices in an effort to deter market entry by new and viable competitors
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market penetration pricing
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Strategy of charging very low initial prices to create a new market or grab market share
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multistage games
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Games where payoffs and strategy are shaped by the order in which various players make their moves
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Nash bargaining
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Where two competitors haggle over some item of value
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Nash equilibrium
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Set of decision strategies where no player can improve through a unilateral change in strategy
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network externalities
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Benefit in consumption of production tied to widespread adoption of a physical or economic standard
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nonprice competition
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Competitive techniques tied to product quality, innovation, promotion, etc.
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one-shot game
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One-time interaction
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payoff matrix
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Player rewards from selected strategies
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predatory pricing
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Pricing below marginal cost to knock out rivals and subsequently raising prices to obtain monopoly profits
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Prisoner’s Dilemma
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Famous simultaneous-move one-shot game showing that counter-part uncertainty leads to suboptimal outcome
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randomized strategies
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Haphazard actions to keep rivals from being able to predict strategic moves
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repeated game
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Ongoing interaction
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secure strategy
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Decision that guarantees the best possible outcome given the worst possible scenario
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simultaneous-move game
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Players move without specific knowledge of countermoves by other players
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trigger strategy
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System of behavior that remains the same until another player takes some course of action that precipitates a different response
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