Useful Tools to Help Solve Decision Making Problems
Applied Game Theory and Strategic Behavior demonstrates the use of various game theory techniques to address practical business, economic, legal, and public policy issues. It also illustrates the benefits of employing strategic thinking that incorporates the uncertainty surrounding the behavior of other parties.
Real-world applications of game theory
Exploring a variety of games, the book outlines the process of modeling game theory questions while thinking strategically. It introduces core concepts through simple examples and case studies taken from the authors’ consulting work in the automotive, beer, wine, and spirits industries as well as in debates over government regulation. The authors include newly developed software applications that can construct and solve game theory models and present strategic options in clear, visual diagrams.
Out of the box and into the business world
Striking the right balance between necessary mathematics and practical applications, this book shows how game theory can be used in real life, not just in mathematical models. It helps readers improve their strategic thinking, define games based on actual situations, model games with payoffs and probabilities, and make strategically sound decisions.
Table of Contents
A Brief History of Game Theory
Why Study Games?
Rapid Discoveries in the Twentieth Century
Introduction to Game Theory Concepts and Strategy
Game Theory, Strategic Behavior, and Strategy
Consumer Behavior, Utility Theory, and Game Theory
Game-Theoretic Models and Illustration
Rules of the Game
Strategy and Equilibrium
Complex Games and Games by Categories
Other Key Game Theory Concepts
Modeling Games with MATLAB and Experimenting Games
Battle of the Sexes
A Sample Game of Dominated Strategies with MATLAB
Theory of Strategic Value
Introduction: The Game of Business
Strategy and Value
States of Nature
State Variables for Business: Control Variables
The Event Tree and Dynamic Payoffs
Real Options and Management Flexibility
What Is "Value" for a Firm?
A Dynamic Game of Asymmetric Information in the Beer Industry
A Game between a Global Brewer and a Growing National Beer Importer
Regulated Alcoholic Beverages Industry and Three-Tier System in the United States
Sales Performance of Gambrinus: General Import Market
Incentives at the Time of the 1996 Decision
Strategic Options Available in 1996 and the Game
Consolidation in the Wine and Spirits Industry
Economic Structure of the Industry
The Wine and Spirits Industry and Consolidation
A Hypothetical Consolidation
Description of the Game
A Regulatory Game: CAFE Standards and Competing Automakers
History of Corporate Average Fuel Efficiency (CAFE)
Statement of the Problem and the Strategic and Game Theoretical Motivation behind CAFE
Building the Game and Players, Strategies, Payoffs, and Solution
On Auto Industry Crisis of 2008 and Analysis of a Potential Merger: Strategic Approach
Introduction and Cause of the 2008 Auto Industry Crisis
Likely Scenarios for the Automotive Industry
Economic and Industry Conditions
Key Events to Date
Discussion of Potential Scenarios
Strategic Approach to a Potential Merger: Strategies of Key Players
Game Theory and Law
Game Theory Examples in Law
Antitrust Case Study: United States of America, et al., v. Microsoft Corporation
Game-Theoretic Model in Microsoft Antitrust Case and Players
The Trial and Conclusions of Law
A senior consultant at Anderson Economic Group, Ilhan Kubilay Geçkil specializes in corporate finance, economics, business valuation, risk analysis, M&A, and strategic consulting. He provides economic forecasts for Bloomberg’s monthly economic survey. One of his recently published papers was honored as the Edmund A. Mennis Contributed Paper Award of the National Association for Business Economics. Mr. Geçkil holds a Master’s in Economics from the Eli Broad Graduate School of Management at Michigan State University and a Bachelor’s in Economics from Koç University in Istanbul, Turkey.
Patrick L. Anderson is the founder and CEO of Anderson Economic Group. Prior to starting his company, Mr. Anderson served as the Chief of Staff for the Michigan Department of State and Deputy Budget Director under former Governor John Engler. A recognized authority on business valuation and commercial damages, Mr. Anderson has provided expert testimony, management, and strategic consulting. He is the executive editor of three edition of the State Economic Handbook and has written more than 100 published works, including the book Business Economics and Finance and a chapter in Litigation Economics. Mr. Anderson is a graduate of the University of Michigan, where he earned a Master’s of Public Policy and a B.A. in political science.