March 2007 - Game Theory as a Management Tool
When we first suggested Game Theory as a management tool, we received some sceptical looks, some surprised looks and some that appeared to be a mixture of incredulity & humour!
However, Game Theory is a very effective framework for improving strategic thinking. At it’s simplest, Game Theory is the study of rational behaviour in situations in which your choices affect others and their choices affect you.
Game Theory provides a vehicle for examining these choices and the results that they produce – both in terms of behaviour and the impact on organisational performance. Classic Prisoner’s Dilemma is a wonderful tool for demonstrating how rational choices can produce apparently ‘irrational’ results.
Game Theory also helps senior managers to focus on key issues of leadership – ensuring that their language and actions are congruent with what they intend to signify to the wider organisation. Game Theory is an all-inclusive approach – we are all players. If you would like to find out more about how Game Theory can be used to improve your organisational performance, email us at email@example.com
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