1.Briefly describe the background of game theory 2.on page 58, it states "Successful business strategy is...

1.Briefly describe the background of game theory

2.on page 58, it states "Successful business strategy is about actively shaping the game you play, not just playing the game you find." Evaluate this statement.

3.Explain how game theory can reflect win-win strategies.

4.Is game theory still relevant to today's business world? Have the five elements changed? 

5.In addition to your own research, relate the answers to any of the two articles we have examined so far.

Homework Answers

Answer #1
  1. Game Theory is almost 50 years old concept helping businesses in making high and risky strategic decisions where high competitive markets are involved. This involves mathematical games that involves set of players, strategies for players, and a payoff strategy for every player. It predicts the outcome of a single firm which is being directly effected by other firms in the market through their strategies.    
  2. The true essence of business is playing the right game and how to play the right game and whether we are playing the right game is what game theory tells us. It puts the player into the shoes of other players and help in knowing the reactions of other players. Thus, it is rightly said that successful business strategies is about actively shaping the game you are playing not just by simply doing the business without any planning.
  3. Game Theory results in a win win situation because it is being designed in such a way that all participants can be benefitted from it in some way or the other. Win Win is just a literal word while in real situation no win win situation happens for the competitive parties but yes business can give fair chance to other participants for their service which is the rule of game theory.
  4. Game Theory has strong relevance today also. Although the scenario has changed but game theory is still being used extensively for taking decisions in the business like Decisions on price and output, decisions on products choice, decisions on promotion strategies, payoff strategies, etc. Although, modern techniques have been introduced in Game theory to meet the requirements of changing business environment.
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