Verified Document

Game Theory Work In Practice Term Paper

¶ … Game Theory Work in Practice

Game theory is often described in terms of the prisoner's dilemma, where a captured prisoner must decide to confess or remain silent, even though he or she possesses imperfect information about his or her accomplice facing the same decision. As the article astutely points out, in the marketplace, the 'prisoners' in the real-life deployment of game theory are competitors in the same market. A certain amount of intuitive collaboration is required so that prices do not go too low in a price war, even though having lower prices can benefit an enterprise but all businesses operate with imperfect information. To 'win' the best feasible solution for one's side, a variety of scenarios must be assessed. Evaluating entry costs, exit costs, demand functions, revenue structures, and cost curves may all be critical in creating future, projected possibilities for the company, and decision-makers must choose the best of all projected futures based upon the likelihood of the different scenarios occurring.

One effective example used by the article is that of the airline industry, which demonstrates that both large and small companies can use game theory. A small company can slash prices and thus make crucial market inroads against major competitors, like Kiwi Airlines, or conversely a large company can make more effective use of economies of scale. Game theory is not equally useful to all industries, in general the larger the industry, the more difficult it is to create accurate scenarios, as eventually the variables that must be analyzed grow too complex and numerous. Also, the article suggests that more aggressively competitive industries, with high fixed costs, and only few 'big deals' will tend to benefit less from game theory, which may seem to somewhat undercut its statement that game theory is growing more useful today -- after all, in many industries, competition has grown even more fierce. But the consolidation of many markets, combined with the future uncertainty of how competitors and consumers will react to shifts in data seems to support the idea that game theory can be very useful to many businesses today when making crucial decisions.

Cite this Document:
Copy Bibliography Citation

Related Documents

Game Theory Analysis in Real Life
Words: 1323 Length: 5 Document Type: Term Paper

Game Theory Why did Apartheid End? A Solution Developed from the Concept of Game Theory James Michener was a history professor at the University of Texas and a widely read chronicler of different periods of history. Michener was largely a novelist, but his novels were based on factual information that was peopled by fictional, but representative, main characters and some historical figures. In a book called "The Covenant," Michener detailed the history of

Theory Building There Are Many
Words: 1031 Length: 3 Document Type: Term Paper

I would agree with this statement, since theory and practice, when applied to each other appropriately, inform each other and cannot in fact be separated into two distinct entities. It is vitally important to use theory for informing practice, while practice would further inform theory, making the statement that a good theory is, in fact, practically true. 5. Benedict Spinoza, a post-Cartesian philosopher in the 17th century, held ideas of which many

Nursing Theory and Practice
Words: 1856 Length: 6 Document Type: Research Paper

autobiography of the author of this report. The remainder of the report will mostly focus on the four meta-paradigms of nursing. Of course, those meta-paradigms are patient, nurse, health and environment. The author will also offer two practice-specific concepts from the scholarly literature that can be applied to the career and environment of the author of this report. Next up will be a list of propositions that will number

Theory in Unearthing the Mechanism
Words: 1674 Length: 5 Document Type: Article Critique

The advantages of network use are apparent enough and from such an obvious position, it is interesting that there is an inadequacy in the understanding of the processes by which networks function. Thus, the article focuses on the role of network governance and its impact on network effectiveness. The authors demonstrate that network effectiveness while not entirely illusive is a difficult prospect. This phenomenon is multifaceted and multi-tiered and consequently

Theory a Critical Discussion of
Words: 4698 Length: 15 Document Type: Essay

English for academic purposes approach focuses on the reader, too, not as a specific individual but as the representative of a discourse community, for example, a specific discipline or academia in general. The reader is an initiated expert who represents a faculty audience. This reader, particularly omniscient and all-powerful, is likely to be an abstract representation, a generalized construct, one reified from an examination of academic assignments and texts

Does the Fisher, Ury Model Work
Words: 29882 Length: 120 Document Type: Dissertation

Negotiation Skills A High Impact Negotiations Model: An Answer to the Limitations of the Fisher, Ury Model of Principled Negotiations This study aims to discover the ways in which blocked negotiations can be overcome by testing the Fisher, Ury model of principled negotiation against one of the researcher's own devising, crafted after studying thousands of negotiation trainees from over 100 multinational corporations on 5 continents. It attempts to discern universal applications of

Sign Up for Unlimited Study Help

Our semester plans gives you unlimited, unrestricted access to our entire library of resources —writing tools, guides, example essays, tutorials, class notes, and more.

Get Started Now