Strategy Game: Nuts and bolts

Game: Suppose you are an exclusive nut manufacturer who has 26 nuts. There are 26 other individuals who have 1 bolt each (but no nuts)
No nut or bolt in isolation have any value. However as a pair each is worth 100/- each.

Now think of yourself as one of the 26 bolt holder. How much do you think will you be able to charge for your bolt? What can you do to increase your bargaining power?
Form a cartel?
Well now comes the strategy part. How as a nut owner, you can counter their cartel and extract the max of the 100/- X 26 = 2,600/- for yourself.

Answers next week

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15 thoughts on “Strategy Game: Nuts and bolts

  1. Sorry. I read that long time back, but thought it is not complete answer, so was waiting.

    I could not understand it clearly.

    Are you saying that, the person sells a bolt and nut for more than Rs.100, and gets Rs.2600 in total?

    For how much he buys bolts? If I hold a bolt, I will never it give for free, eventhough I don’t get anything. You are saying, he destroys 2-3 bolts. Then, how can he get Rs.2600?

    Like

  2. each nut and bolt pair is worth 100/- and there are a maximum of 26 such pairs possible. However the question is how do you as the sole nut supplier is able to defeat the cartel of bolt supplier and maximize your return.

    by destroying nuts, you are destroying value, so the value of the game gets reduced from 2600 to 2300. However by changing the rules of the game, you create a new game where the bolt suppliers have less bargaining power and you maximize your profit.

    Like

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