, Inc. and ILEN are the two largest companies that produce and sell database software. They each have been negotiating to buy DSOFT, the third largest company in the database software market. Polar currently has 50% of the world market for database software, ILEN has 35%, DSOFT has 10%, and there are several other smaller companies that share the remaining 5% of the market for database software. Financial and market analysts at Polar have estimated the value of DSOFT to be $300 million in net worth. Throughout the preliminary negotiations, DSOFT has made it clear that they will not accept a purchase offer below $300 million. Jacob Pratt, the CEO of Polar, figures that acquiring DSOFT will make Polar the dominant player in the industry as Polar would then have 60% of the market..In addition, Jacob knows that DSOFT has been developing a new product that has tremendous earnings potential. Jacob has estimated that the new product would increase the net worth of DSOFT by an additional $300 million with probability 0.50, by an additional $150 million with probability 0.30, or have no impact on net worth with probability 0.20. To simplify matters, Jacob has decided to consider three possible strategies regarding the possible purchase of DSOFT: (i) Make a high offer of $400 million; (ii) make a low offer of $320 million; or (iii) make no offer at all. If he pursues this third strategy (making no offer), Jacob is certain that ILEN will buy DSOFT. If Polar makes an offer to DSOFT (either a high or a low offer), Jacob figures that ILEN will increase the offer further. He is uncertain about what ILEN will offer in this case, but he has made the following intelligent estimates of possible outcomes: ILEN would increase Polars offer by 10% with probability 0.30, by 20% with probability 0.40, or by 30% with probability 0.30. If ILEN were to make such an offer, Jacob would then need to decide whether he would make a final offer to DSOFT. His thinking is that after ILEN makes a counter-offer, Polar would either withdraw from the bidding, match the counter-offer, or make a final offer at 10% above ILENs counter-offer. If Polars offer and ILENs offer are identical, Jacob estimates that the probability that DSOFT will accept Polars final offer is 0.40 ; however, if Polar counters with an offer which is 10% higher than ILENs offer, Jacob estimates that DSOFT will accept Polars final offer with probability 0.60. Questions (a) Structure Polars acquisition offer problem as a decision tree. (b) Solve for the optimal decision strategy for Polar..

Place your order
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
The price is based on these factors:
Academic level
Number of pages
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more