THE GAME THEORY’S APPLICABILITY IN THE TECHNOLOGY SECTOR: THE CASE OF INTEL AND AMD

Abstract

This paper discusses the dominance of AMD and Intel as they are the two main computer chip producers in the market and their price reduction strategies that resulted in a loss for both enterprises. Also, the paper highlights the applied prisoner dilemma strategy. The methodology section of this research includes a payoff matrix between the two companies, followed by an analysis of CPU prices offered by Intel and AMD. And finally, an illustration of Intel’s share of sales to analyze the market standing of the two companies. The findings of this study show that Intel needs to readjust its pricing policy as slashing prices cannot be maintained in the long term.