Problem: Applying Game Theory to Strategy
Imagine that you own a pharmacy in your area.
One of your competitors launches a "We will not be undersold" campaign, which promises consumers 150 % of any difference between its prices and the advertised prices of other pharmacies.
• Evaluate the social issues in your community as well as the economic culture that is influencing this type of pricing competition.
• Develop and describe a microeconomic model that is responsive to the service demands of your market.
• Based on your conclusions, how would you react to this situation and with what business strategy would you approach this?
• How might you apply game theory to the creation of your strategy?
The response should include a reference list. Using double-space, Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.