Price wars

There is a well-known law of nature: “the fittest survive” but it is not only about animals and plants, it also applies to humans and all sides of their lives including economic one. The world is developing in direction of mind power but people and companies still try to find their strong points and the best strategy to win in the struggle for survival.

Introduction……………………………………………………………………………….3
Price wars………………………………………………………………………………....4
Historical report……………………………………………………………………...4
Determination of a price war………………………………………………………...5
Effects of a price war…………………………………………………………………6
Positive effects of a price war………………………………………………..6
Negative effects on firms……………………………………………………..6
Negative effects on customers and the public………………………………...7
Possible tactics………………………………………………………………………..7
Price war in hotel industry………………………………………………………………..9
Description of the situation……………………………………………………...........9
Analysis of the case…………………………………………………………………10
Model of non-cooperative game……………………………………………..10
Reaction functions…………………………………………………………...10
Conclusion……………………………………………………………………………….14
Bibliography……………………………………………………