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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
Zellers and Wal-Mart are two of Canada’s largest retailers. To reflect the strong position of the Canadian dollar, each firm is considering lowering prices on some goods in Canadian stores. The following table displays the payoffs for each firm associated with lowering prices (or not), given the other firm’s decision:
If Zellers |
And Wal-Mart |
Then, Zellers’s |
And Wal-Mart’s |
decides to . . . |
decides to . . . |
profits are . . . |
profits are . . . |
Keep prices |
Keep prices |
$200MM |
$250MM |
the same |
the same |
 |
 |
Keep prices |
Drop prices |
$150MM |
$280MM |
the same |
 |
 |
 |
Drop prices |
Keep prices |
$230MM |
$190MM |
 |
the same |
 |
 |
Drop prices |
Drop prices |
$180MM |
$220MM |
If given the opportunity, how much would Zellers be willing to spend for the right to move first?
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