Spectrum Economics Challenge 6: Cooperation vs Competition

However, in this challenge we must devise the best strategy for cooperation, competition or both by applying game theory. The purpose of game theory is to find the optimal strategy by anticipating and anticipating the strategy of the rest.

The Best Buy bakery would compete with the rest of the bakeries in spite of offering the public an average range of pastries, cakes and mass produced breads as it has the most modern equipment that allows it to customize its exclusive products and can replicate all the products offered by Thompsons which is its largest competitor. In addition to this Best Buy can obtain bulk ingredients at a much lower price so your products are high level at a low cost. Its clientele is not very large but revenues are increasing significantly so that in the coming months these figures could cause the bakery to expand its premises and the range of cakes, cakes and breads it produces to receive many more customers. And so offer a product of very good quality, personalized and at an affordable cost.

On the other hand, it would make a cooperation between the bakeries Thompsons, Yummy yum yum yum and Draxton's Cakes that would be based mainly on making an alliance based on the weaknesses and strengths that each one has. Thompsons cooperates with the smaller bakeries taking into account that it does not have the adequate machinery to offer personalized and exclusive products. Yummy yum yum yum and Draxton's Cakes don't own it either but they have the advantage of making a lot of exclusive products that Thompsons doesn't make. In addition, Yummy Yum Yum Yum and Draxton's Cakes, despite having a large clientele, are not doing very well and are losing out on their sales and could access the benefits of Thompsons such as buying ingredients in bulk, which would greatly reduce the price of their products. The cooperation between these 3 bakeries would lead to an exclusive product of high quality and reasonable price. With the support of the customer base of Thompsons, the largest bakery, and Draxton's Cakes, the first bakery to open in Dodo Town. In a few months, thanks to the reduction in the prices of its products and the reduction in the costs of acquiring its ingredients, it would be possible to acquire machinery for the elaboration of the products, which would translate into greater production and greater profits for the alliance between these three bakeries.