Problem 1: "Required three pages to cover bot part A & B )
(Part A) In the context of oligopoly pricing, how does the nature of the game change according to whether products are substitutes or complements? What determines the profitabilities of the suppliers? Why is the sales of complements similar in nature to the problem faced by negotiators who must agree to " split the pie " appropriately ?
(Part B) Find two examples of pairs of products that are , respectively , (i) substitutes and (ii) complement , and relate those cases to your game-theoretic analysis from pat A.
Problem 2: " required three pages to cover bot part A & B )
(Part A) What are the major forms of auction format for the sale a single object? For buyers who know their valuations for the object, what are the optimal bid- ding strategies? What happens if the auctioneer is procuring (that is, seeking to buy; this is a tendering process) and the bidders are competing sellers?
(Part B) Describe a real auction or tender process. Explain the rules, including the re- serve price (if any), the number of bidders, and the likely ranges for bidders' valuations. If you were a participant, then what would you do?