A finished DBA-815 Topic 6 repeated pricing game analysis example, pricing a proposed dues cut against the rival's likely reply and showing a tested elasticity overstates what a permanent cut gains. Searches like "dba 815 topic 6 assignment example", "dba815 topic 6 sample" and "dba-815 topic 6 example" land here.
What a finished DBA-815 Topic 6 repeated pricing game analysis looks like
The matrix comes first, per overlap club and per month, figures illustrative. With both at $49, the chain's club earns about $99,900 in contribution. Cutting alone to $44 lifts that to about $108,000, because the new-member test's overlap pairs suggested an own elasticity near -2.5 while the rival's price stood still. Being undercut drops it to about $74,900, and a matched cut leaves $89,900. Read as one round, cutting dominates, and both firms finish in a cell each likes less than mutual restraint. The analysis then asks which elasticity a permanent cut would meet. The test was too brief and too narrow to provoke a reply; a standing cut would draw one, since the rival matched the chain's joining-fee waiver two years ago within three weeks. Along that reaction the cut costs about a tenth of contribution.
How a DBA-815 Topic 6 example is structured
Players, moves and timing are fixed before any payoff appears: two firms, five shared markets, dues reset monthly and no contact between them, since the reasoning must hold without it. Each cell is then built from members, dues and the $12 marginal cost rather than estimated by feel. The one-shot reading comes next, showing cutting as each firm's dominant move and the matched cut as its equilibrium. The repeated game follows, treating the rival's three-week match of the joining-fee waiver as evidence of how it plays, with Axelrod's tournament result on tit-for-tat explaining why copying the last move is a strategy rather than a reflex. The strongest objection, that members won before the rival replies will stay because switching gyms is costly, is costed over the three-week lag and set against lower dues for every existing member. It ends by costing a second round, a further cut to $40.
Five shared markets, monthly moves
The game covers only the clubs that overlap the regional rival, where each firm resets dues monthly and neither communicates with the other about price.
A matrix that rewards cutting once
Read as a single round, a cut to $44 beats holding at $49 whatever the rival does, which makes the matched cut the one-shot equilibrium.
The test measured a silent rival
Eight weeks of new-member prices were too small to draw a reply, so the elasticity near -2.5 describes conditions a permanent cut would end.
Three weeks to match a waiver
Two years ago the rival answered a joining-fee waiver by the chain inside three weeks, the clearest record available of how it plays repeated rounds.
Sticky members do not rescue the cut
Switching is slow in both directions, so three weeks of extra joiners cannot offset lower dues charged to every existing member once the rival matches.
A second round costed
A further cut to $40 after the match would be answered in the same way, lowering contribution again with no gain in members to show for it.
Where marks go in DBA-815 Topic 6
Most of the marks lost here trace to a payoff matrix read as a single round, which recommends exactly the cut the repeated game punishes. Papers that feed the test's -2.5 straight into a permanent price change misread elasticity in a quieter way: that figure held the rival's price fixed, and a lasting cut removes the condition. Asserting that the rival will match, with no record of how it behaved before, swaps evidence for a guess about temperament. The switching-cost objection is often raised and left unanswered, or answered by assuming new members arrive at once when they arrive over months. Some analyses propose signaling restraint through public statements aimed at the rival or direct contact with it, which moves from strategy into antitrust exposure. Stopping at the first match leaves the rival's second move unpriced.
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Send the DBA-815 Topic 6 instructions, the rubric from your classroom and the rivals, prices or scenario the assignment gives. A custom example is written to them in 24 to 48 hours, with the game's players and timing set, payoffs built from the firm's own numbers, the rival's past behavior used as evidence and a second round costed. The first one is free.
DBA-815 Topic 6 questions, answered
Why does the one-shot matrix give the wrong answer?
Because the chain and the rival do not meet once. They set dues every month in the same five markets, so a cut today changes what the rival charges next month. In a single round, cutting beats holding whatever the other side does. Across repeated rounds, a rival that answers cuts makes restraint worth more than the brief gain from moving first, and that comparison is the one the example prices.
What did Axelrod's tournaments show?
Robert Axelrod invited strategies for a repeated prisoner's dilemma and ran them against each other in computer tournaments. Tit-for-tat, which cooperates in the first round and then copies whatever the other player did last, earned the highest total score despite its simplicity. The example uses the finding to read the rival's three-week match as a coherent strategy, not as an overreaction the chain can wait out.
Is the -2.5 elasticity still useful?
Yes, for the question it answers. It describes how new joiners at the overlap clubs respond to the chain's price while the rival's price stays put, which suits a small, temporary or targeted move the rival will not bother to answer. It is the wrong figure for a standing cut at five clubs. The example also flags that it was measured on a price rise and applied to a cut, an assumption of symmetry.