Ivey Publishing
Note on Application of Game Theory in Business
Product Number:
9B14E017
Publication Date:
07/31/2014
Revised Date:
07/31/2014
Length:
6 pages (6 pages of text)
Product Type:
Note
Source:
Ivey
Business happens in a network consisting of different firms who have correlations with each other. For example, an automobile manufacturer has many dealers in different locations. There are correlations between the manufacturer and the dealers and correlations among the dealers. Each firm’s decision on matters such as price influences the other firms’ profits. By using the concept of game theory, such a decision can be based on a reasonable rationale. Yet, to apply game theory to real-world problems, we must first understand the “game rules” in business through analyzing horizontal and vertical correlations between firms and how such features as information asymmetry affects the equilibrium solution.
Learning Objective:
As part of the reading material for an honours undergraduate or graduate level course related to game theory, the objective of this note is to provide background information on how to solve firms' operating decisions at equilibrium when these impact others’ objectives.
Issues:
Disciplines:
Management Science
Industries:
Manufacturing
Setting:
2014
Intended Audience:
Intro/Undergraduate
Price:
$4.25 CAD / $4.25 USD Printed Copy
$3.75 CAD / $3.75 USD Permissions
$3.75 CAD / $3.75 USD Digital Download
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