Though I have heard of game theory being used in a few particular and special cases (e.g. the auctioning of 3G cellphone licenses) I have not seen anything of it being used in general strategic management or business planning. The strategy textbooks dismiss it as too uni-dimensional and limited to special cases to be useful, and I can find virtually no articles in e.g. Harvard Business Review or McKinsey Quarterly giving any encouraging cases where it has been helpful. (Though I did see on 12manage reference to a strategy+business article on Barry Nalebuff).
Does anyone know otherwise?
Thomas Schelling was given the Nobel Prize for his strategic thinking and use of simple game theory.
Nalebuff and Brandenberg’s co-opetition is probably still the best use of game theory for reviewing business strategy:
http://mayet.som.yale.edu/coopetition/
Thanks Michael – I appreciate that game theory is much admired, and have this book. But my question is whether anyone in the real world is actually using it for strategy – are you doing so, for example?
We do use game theory with computer-aided market modeling in consulting projects for large corporations. The tool was developed by my team at Karlsruhe University, Germany. See our recently published McKinsey Quarterly article “making game theory work for managers”:
http://www.mckinseyquarterly.com/Making_game_theory_work_for_managers_2493
Comments and conversation welcome.