Question
While the content does not provide specific examples of companies that have used game theory to reduce business risk, there are several well-known cases in the business world. For instance, Microsoft and Sony have used game theory in their strategic decision-making processes for the gaming console market. They used game theory to anticipate each other's moves and make strategic decisions about pricing and product launches. Similarly, airlines often use game theory to decide ticket prices, flight routes, and capacity. These companies use game theory to understand their competitors' potential moves and to strategically respond to them, thereby reducing business risk.
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It can help reduce the business risk – When applied correctly, game theory can assist when it comes time to creating the best pricing ideas and strategies, projected market shares and even income expectations. It will also help anyone better understand the customers and their decision making processes. It can help to understand the competition – In the business world, knowing everything about the competition is very important. By using game theory, a manager will gain more insight into the competition than ever before. It will allow a peek into knowing their weaknesses and strengths, and how they operate. The more information that is assembled about the competition, the better the end result. It can help with the decision making process – The best game players know and understand the importance of research when it comes time to making any decision. Smart business leaders will brainstorm every possible outcome before reaching any final conclusions.
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