Application of the Prisoners’ Dilemma

Application of the Prisoners’ Dilemma

7. The following is a case study using a recent event:

CVS versus Walgreens: An interesting recent case involves two

pharmacists CVS and Walgreens. Rather than a situation where the

two indulge in a competitive battle against each other over advertising

or a price war, they battle against each other on the services offered.

In early June 2010, Walgreens announced that it would “no longer participate

in new and renewed benefit plans from its rivals (CVS) drug

benefits unit” (CNN Money, June 7 2010). The main grievance of Walgreens

was CVS Caremark’s Maintenance Choice Plan which started

requiring patients that have chronic medical conditions to fill their prescriptions

at CVS pharmacies only rather than giving them the choice

to fill it at Walgreens (or other pharmacies). As a result of this announcement

both companies shares fell — CVS fell 8% and Walgreens

fell 2.7%. As a response CVS in a couple of days decided to drop Walgreens

from its pharmacy benefits plan, which would force some of its

benefits customers to pay a much larger amount to get their drugs from

Walgreens, leading to a potential loss of customers for Walgreens. As a

result CVS shares fell 1.5% and Walgreens fell 3%. Eventually, about

a week later the two pharmacies decided to end their war, coming to a

compromise agreement the financial terms of which were not disclosed.

As a result both firms saw their stock values increase.

 

write 2 compeltely different Briefly comments on this example as an application of the Prisoners

Dilemma game

 

 

each Briefly comments  should be at least 135 works that means the 2 Briefly comments should be at least 270 words

 

when you make the comments make it very seprate.

the contidion each comment should be compeletly differance each other

Solution Preview
When the pharmacy decided to opt out of the CVS’ new and renewed benefit plans for the drug benefits unit, one that required that all patients that had chronic medical conditions had to fill their prescriptions at CVS pharmacies rather than at Walgreens or any other pharmacy, there were losses incurred on both sides. The move saw the Walgreens shares fall by 2.7% and those…
(380 Words)
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