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Game Theory- Ford and GM

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1. Why would Ford want to lower price while keep GM keeps it high?

2. What is the best choice in this game when GM and Ford trust each other?

3. What will the oligopolists choose if they do not trust each other?

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Solution Summary

Ford would like to lower prices while GM keeps it high in order to capture the whole market share.

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1) Ford would like to lower prices while GM keeps it high in order to capture the whole market share. It will enable Ford to capture those customers who have been hit by the GM's high prices. Price sensitive customers ...

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Sandeep Bardia, MBA
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  • BCom, SGTB Khalsa College, University of Delhi
  • MBA, Rochester Institute of Technology
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