what's the "Game theory" in project budget?

Question

in project management

Answer 1

Game Theory

Most business strategy decisions are interdependent -- the best strategy for one company often depends vitally on the related strategy choices made by its competitors, customers, suppliers, and complementary goods and service providers. Game theory is the study of how strategic decisions are and should be made, given these interdependencies. A good game theorist "looks forward and reasons backward" to determine whether any move he or she makes is likely to elicit a favorable competitive response.

Using game theory, you're supposed to:
* Learn how to focus companies' competitive intelligence efforts to better understand and characterize interdependent strategy choices.
* Model key strategy choices that companies face, and develop strategies that better account for likely competitor actions and reactions.
* Gain an understanding of tools and frameworks that enable decision makers to "look forward and reason backwards" when making interdependent strategy choices.
* Evaluate the "best" strategies to play in common business situations (e.g. price wars, market entry strategies, major capacity expansions, market exit strategies)
* Identify long-term strategies and short-term tactics that help improve company and industry performance in oligopoly markets.

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