Strategic Advertising Decisions

Two competing airlines, AeroFly and JetStream, are the only carriers on a specific route. They are simultaneously deciding whether to offer a deep discount on fares. If both offer the discount, they will both earn a small profit. If neither offers the discount, they will both earn a large profit. However, if one airline offers the discount while the other does not, the discounting airline will capture most of the market and earn a very large profit, while the other will incur a loss. Assuming both airlines act in their own immediate self-interest without communicating, they will both likely offer the discount. What is the most effective way for these airlines to achieve the more profitable outcome where neither offers a discount?

The Farmers' Grazing Dilemma

What was the most significant and novel contribution of Augustin Cournot's 1838 work, 'Recherches sur les Principes Mathématiques de la Théorie des Richesses', to the field of economics?

Evaluating the Stability of a Cooperative Agreement

In a one-time strategic interaction between two rational, self-interested parties, if both parties recognize that a cooperative action would lead to a better outcome for both of them compared to the non-cooperative equilibrium, this mutual recognition alone is sufficient to ensure they will achieve the cooperative outcome.

A company needs to hire at least 5 new software developers from a pool of 8 qualified candidates. The minimum annual salary each candidate is willing to accept is listed below. What is the lowest uniform salary the company can offer to ensure it has a large enough pool of willing applicants (at least 5) to fill its open positions?

Candidate Minimum Salaries:

• Alex: $90,000
• Ben: $92,000
• Carla: $95,000
• David: $95,000
• Eva: $100,000
• Frank: $102,000
• Grace: $105,000
• Henry: $110,000

International Environmental Policy Dilemma

R&D Investment Dilemma

Evaluating the Stability of a Cooperative Agreement