Tag Archives: chicken

Mathematics of a price war

In my last post I looked at two companies competing over a natural monopoly. We saw that once they started competing it would not then make sense for either company to drop out. This is why price wars tend to … Continue reading

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Why you won’t win a price war

Today I will look at a simplified situation where two companies are battling over a natural monopoly. Whilst they are both competing the market isn’t big enough for either of them to make a profit. Once one of them drops … Continue reading

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David Cameron, credit cards and game theory

The first version of David Cameron’s speech to the Conservative party conference contained a call to households to pay off their credit card debts. What’s the game theory of paying off your personal debts? We might represent the situation through … Continue reading

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