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Game Theory Expert Analyzes Market Basket Conflict

BOSTON — The Market Basket saga continued Tuesday with words like “hostage” being tossed around in public statements from officials within the supermarket chain, which is staggering from an almost-full customer boycott.

The statement came from a group of board members that call themselves independent and say they’re seeking to resolve the situation. With the company losing millions a week, emotions remain at a peak for workers who are steadfast.

For more on Market Basket and the latest shift in the language, Duke University economics professor and game theory expert David McAdams joined WBUR’s Morning Edition.

Interview Highlights:

On whether former CEO Arthur T. Demoulas has taken Market Basket hostage:

No, Bob. This hostage-taker analogy really doesn’t fit here. Arthur T. isn’t threatening to blow the company up. The company was already blown up by the board when they fired Arthur T. and triggered this devastating worker strike. The fact that Market Basket’s employees are only willing to work for Arthur T. puts him in an extremely powerful position when it comes to negotiating with the board.

On whether a third party buying Market Basket is a realistic option:

Well, of course they could attempt to sell the company to another bidder, but that’s really not a good option for them or for that other suitor. For example, if Hannaford were to come in and buy Market Basket they’d just be buying the same problems that the board is struggling with today, so, knowing this, knowing that Market Basket is essentially damaged goods right now, outside suitors won’t be willing to pay nearly as much as before the crisis began.

On whether everyone is losing at the moment:

They’re all losing. This is not a zero-sum game. This is a lose-lose game, Bob. And it’s important to remember that even though it’s tempting to think of this as just posturing by these players, words really do matter. When you make strong statements like that, it changes the stakes emotionally — all the more so because of this charged family dynamic playing out here in public.

On some shoppers not returning to Market Basket: 

That’s a big reason why outside suitors are going to hesitate to before they buy the company. On the other hand, if Arthur T. gets the company back I’m imagining, Bob, you’re going to have another piece on that, so customers are going to quickly become aware that business is going back to usual at Market Basket.

On the best way out of the situation:

There’s only one reasonable option for the board at this point, and they’re not going to like it: it’s to sell to Arthur T., and to do this as quickly as possible because every day that this standoff continues is one more day of lost revenue and damage to the Market Basket brand.

That said, just because Arthur T. is holding all the cards doesn’t mean that he should take the shirt off Arthur S.’s back. Anger and pride are getting in the way of a deal here. So the best move for Arthur T. could actually be to surprise his cousin with a little grace — find a way for Arthur S. and the board to leave the game with their dignity in-tact, and everybody wins.

On whether that outcome is realistic: 

There’s a long history here between these families, and, quite frankly, I wouldn’t be hopeful that they can find a higher ground.

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