Economics · Microeconomics

Industrial Organisation — Entry, Exit & Predatory Pricing

Run a three-firm Costarian beverage industry through the full entry / fight / exit cycle. Surface barriers, contestability, predation and the war of attrition.

3 rounds Executive English, Español

Preview

About this simulation

Run a three-firm Costarian beverage industry through the full entry / fight / exit cycle. Surface barriers, contestability, predation and the war of attrition.

Three rounds: Tropico's entry decision (Mercurio NPV under three incumbent reactions), Helio Verde's accommodate-vs-fight decision (Areeda-Turner, Brooke Group, AKZO, Wanadoo), and Tropico's exit-or-pivot decision (sunk-cost fallacy and Bulow-Klemperer war of attrition).

Who it is for

An advanced simulation for participants used to working with the main frameworks and trade-offs of the subject, designed for executive education and experienced professionals.

How a session runs

  1. The instructor creates a session from the Eureka dashboard and invites the participants.
  2. Participants play 3 rounds. In each one they submit their decisions and the simulation calculates the results. The first round opens with: Tropico entry decision.
  3. The simulation can be run in English, Español.
  4. The instructor follows each participant's progress and results from the dashboard, and uses the class results for the debrief.

Decisions participants make

The decisions participants make during the simulation:

  • Belief prior over incumbent reactions
  • P(accommodate)
  • P(weak fight)
  • P(predation)
  • Recommendation to Mercurio Capital
  • Posture for the next 12 months
  • Advertising posture
  • Legal posture

Subjects covered

Designed for courses in Microeconomics.

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