When McDonald's Corp. reduced the price of its Big Mac by 75% if customers also purchased french fries and a soft drink, The Wall Street Journal reported that the company was hoping the novel promotion would revive its US sales growth. It didn't. Within two weeks sales had fallen. Using the game theory, what disrupted McDonald's plans?

Why would I pay full price for something that is only worth 1/4 that much if I also buy junk with it?

To analyze the situation and understand how game theory may have disrupted McDonald's plans, let's break it down step by step:

1. McDonald's reduced the price of its Big Mac by 75% but added a condition: Customers had to also purchase french fries and a soft drink. This promotion aimed to increase sales and revive growth in the US market.

2. The Wall Street Journal reported on this novel promotion, giving it visibility and potentially influencing customer behavior.

3. Despite the promotion, sales at McDonald's fell within two weeks, suggesting that the initial objective of increasing sales was not achieved.

Now, let's apply game theory to identify potential factors that could have disrupted McDonald's plans:

1. Strategic Decision-Making: In game theory, participants (in this case, customers) make strategic decisions to maximize their own benefits. Customers may have analyzed the promotion and decided that the overall cost, even with the discount, was still not attractive enough to incentivize them to purchase the Big Mac, fries, and a drink. It's possible that customers felt the additional purchases outweighed the saving from the discounted burger.

2. Competitor Responses: Game theory also considers the responses of competitors. McDonald's competitors could have introduced their own promotions to counteract McDonald's strategy, offering alternative deals that attracted customers away from McDonald's. This competition could have diluted the potential benefits McDonald's expected to gain from the promotion.

3. Customer Expectations: Customers may have had higher expectations for the promotion. If they had anticipated even deeper discounts or additional offers beyond the initial sale, they might have been disappointed by the actual promotion and decided not to participate.

4. Market Saturation: It is possible that the market for Big Macs, fries, and drinks was already saturated or experiencing decline due to other factors not directly related to the promotion. This may have limited the effects of the discount strategy and resulted in the overall sales decline.

These are some potential factors that could have disrupted McDonald's plans based on game theory analysis. However, without additional information or data, it is difficult to pinpoint the exact causes.