1. Faced with the increased costs delivering both DVD by mail and for streaming online content it is clear that Netflix had to take some action. Describe the decision making process you would have advised Netflix management to follow.

2. What values are reflected in the Netflix decisions presented in the case?

3. Think back to the concept of escalation of commitment. Is Netflix’s continuation with this pricing action (which is resulting in a large loss of customers) reflective of escalation of commitment or a rational plan?