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The Sales Force Is Rewarded on a Commission Basis

question 54

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The sales force is rewarded on a commission basis.It wants to sell quantity and is willing to be flexible on price,whereas the organizations strategy is high quality,high price.Identify this source of conflict.


Definitions:

Pure Strategy Equilibria

A solution concept in game theory where players choose a single strategy that maximizes their payoff given the strategies chosen by the other players.

Swerve

In game theory, a strategy that involves a sudden change in direction or decision, especially to avoid a negative outcome.

Chicken

a domesticated bird commonly raised for its meat and eggs; also can denote a game in which two players head towards each other, and the first to veer away is considered the loser.

Payoff

The return or gain received from an investment or decision, representing the benefits accruing to the involved parties.

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