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?© BrainMass Inc. brainmass.com October 16, 2018, 11:41 pm ad1c9bdddf
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 ...
Game theory and oligopoly as it applies to AMD and Intel are provided.
Competition, Coordination & Equilibrium
1. Suppose Microsoft can produce a new sophisticated software product. However, it wants to do so only if Intel produces high-speed microprocessors. Otherwise, the software will not sell. Intel, in turn, wants to produce high-speed microprocessors only if there is popular software on the market that requires high-speed processing. Is this a game of competition or coordination? What is the equilibrium?
2. What is the relation between a dominant strategy and a Nash equilibrium?View Full Posting Details