Game Theory Practices in Business Organisation

Abstract

Decisions are made under different conditions or situations. The process the decision maker takes absolutely depends on the situation in which he finds himself. Game theory is an operations research technique that deals with decision making under conflict or competition. A game consists of an infinite and finite number of players who can make strategic moves which will result into the best payoff of them. It represents a situation of lack of information in which intelligent opponents (players) are working in a conflicting environment. The game theory is a mathematical theory that with the general features of competitive situations where individuals or organizations with conflicting objective try to make decisions. Under this condition, a decision made by one decision maker affects the decision made by one or the other and the final outcome depends upon the decision of all the purities. This theory is applicable to wide variety of conditions such as two players struggling to win at monopoly game, chess, candidates, fighting to win an election, two enemies planning war tactics, firms struggling to gain market dominance, lunching advertisement campaigns by companies of the same product line, negotiation between organizations and unions are some of the conditions under which the theory of game can be applied.