LEHIGH STUDENT STORIES 32 LEHIGH BUSINESS MAGAZINE I Zquiz We’ll test your business knowledge in each issue of Lehigh Business and give you an opportunity to win bragging rights and Lehigh swag. This Biz Quiz comes courtesy of James Dearden, professor of economics and a specialist in game theory. B Think you know the answer? Submit your answers (you don’t have to know all three) to lehighbusiness@lehigh.edu by Jan. 1, 2024. We’ll post the correct answer on https://go.lehigh.edu/lehighbusiness by Jan. 15, 2024. One winner will be randomly selected from all of the correct solutions and receive some Lehigh Business swag. The randomly selected winner from all of the correct submissions from our 2022 issue was Ryan Groves ’20. Congratulations! YIPEE-KI-YAY. . . Business relationships frequently involve promises and threats: A building contractor promises a completion date; an incumbent firm threatens a potential entrant with a price war; a habitually late employee promises to be on time in the future. The question for the recipient of a promise or threat is whether the sender’s actions will credibly match their words. If the potential entrant, for example, believes that the threat of a price war is empty, they might want to enter the market. Whether in business relationships or in life’s relationships, we should seek guidance as senders of promises and threats about how to make them credible (i.e., how to convince recipients that it is in their best interest to carry them out) and as recipients about whether to believe the promises or threats are credible. We can examine this question further by examining a few films and using game theoretic analysis. The films Die Hard, Crimson Tide, and The Maltese Falcon each contain a scene that depicts a strategic threat made by a primary character— a threat that is the starting move in a game interaction between two characters in the film. What is the threat? The screenplay of one of the films captures perfectly the strategic interaction between the characters as the move is played. In the screenplay, a description is given for the game theoretic equilibrium of the interaction and the character speaks to the credibility of his threat. Which screenplay? The character who employs the strategic threat in this film states one of the most elegant and convincing lines in film regarding the motive of another character to carry out a threat, even though it (superficially) appears to not be in their best interest to do so. What is the line?
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