Game Theory at Work: How to Use Game Theory to Outthink and Outmaneuver Your Competition
An easy-to-follow, non-technical approach to using game theory in every business battle\ Game theory has become entrenched in today's business world. It has also often required oppressive and incomprehensible mathematics. Game Theory at Work steers around math and pedagogy to make this innovative tool accessible to a larger audience and allow all levels of business to use it to both improve decision-making skills and eliminate potentially lethal uncertainty.\ This proven tool requires...
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Easy-to-Follow Strategies for Using Game Theory to Grab the Upper Hand in Every Business BattleGame theory—the study of how competitors act, react, and interact in the strategic pursuit of their own self-interest—has become an essential competitive tool in today's business arena. Game Theory at Work provides examples of how businesspeople can use this time-proven approach to successfully meet competitive challenges and, more often than not, claim the upper ground in each battle before it begins.Game Theory at Work steers clear of the opaque mathematics and pedagogy that so often hamper practitioners of game theory, relying instead on lively case studies and examples to illustrate its remarkable methods in action. Complex yet comprehensible, it provides you with: Methods for applying game theory to every facet of business Strategies for instantly improving your position in virtually any negotiation Game theory techniques to increase the output—and value—of each employee At its essence, business is a game, albeit a profoundly serious game that must always be played to win. Game Theory at Work is the first plain-English examination of the use of game theory in business. Let it provide you with the intellectual tools you need to instantly understand every game you're playing, use that knowledge to your advantage, and consistently maximize your finish-line payoff."Game Theory at Work won't teach you about power-chants, discuss the importance of balancing work and family, or inspire you to become a more caring leader. This book will instead help you out-strategize, or at least keep up with, competitors inside and outside your company."—From the IntroductionLike Sun Tzu's timeless The Art of War, Game Theory at Work is about knowing your adversary as well as yourself. It is also about using that knowledge to prepare yourself for victory.But above all, this one-of-a-kind book is about dramatically improving your strategic instincts and decision-making skills—and emerging victorious—in virtually any business encounter.Introduced by John von Neumann and Oskar Morgenstern in their 1944 book Theory of Games and Economic Behavior, and further honed through the decades by thought leaders including Nobel Prize winner John Nash, game theory analyzes strategic interactions in which the outcomes of various choices depend on the choices of others. Game Theory at Work applies this innovative tool to the world of business, and provides a step-by-step framework for using game theory to improve your on-the-job success in areas including: Negotiating Managing Pricing Positioning Establishing strategic alliances More than that, however, Game Theory at Work is a one-of-a-kind tool to battle the high costs of indecision. It shows you how to enter any encounter confident in how others will act, and then use game theory to base your strategies and actions on this knowledge. Case studies, puzzles, and, yes, games demonstrate why unexpected and often paradoxical results are the norm when humans compete, and help you use this fact to your advantage. And, chapter-ending lessons highlight essential rules learned... All in a book that is both absorbing and entertaining, designed to improve your business instincts without requiring the use of needless mathematics or theoretical mumbo-jumbo.Everything in life is competitive in one way or another, and game theory has revolutionized the art and science of what to look for—and how to act—when engaged in competition. Game Theory at Work studies the use of game theory in today's hard-fought business arena, and shows you how to use it to gain maximum advantage in every professional encounter, whatever your role in that encounter.James Miller, Ph.D., J.D. is assistant professor of economics at Smith College. Dr. Miller has written over fifty articles on diverse topics from game theory to Greek Mythology, e-commerce, and military strategy. His work has appeared in popular and professional resources including the Orlando Sentinel, The Weekly Standard, International Review of Law and Economics, and Journal of Information, Law and Technology, and the Internet sites for National Review, CNBC, and Fox News.
1Introduction12Threats, Promises, and Sequential Games73The Dangers of Price Competition434Simultaneous Games515Massive Coordination Games856Nash Equilibria1017Prisoner's Dilemma1158Adverse Selection1519Surviving with Limited Information16310Price Discrimination and Other Pricing Strategies18311Holdups19512Spending Other People's Money20713Managing Employees22314Negotiations24115Auctions24916The Stock Market25717Further Readings and References265App.: Study Questions271Notes293Index299
