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Game theory in computer microprocessors

Advanced Micro Devices announced a 10% price increase for certain advanced microprocessors, used primarily in video games. The processors will sell for about $1,000 compared to Intel's $950 price. Why do you suppose AMD would announce publicize such a strategic move? Is this consistent with what you understand of game theory?

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AMD is acting as a price leader in this situation. In oligopolies, such as the microprocesor industry, each company watches the moves of the others carefully. Often, one will take the lead in establishing ...

Solution Summary

Game theory and oligopoly as it applies to AMD and Intel are provided.