Out-think! : how to use game theory to outsmart your competition

235 Pages·2016·7.96 MB·English

by  Sumit Sarkar

sumit sarkar-OBC~Press.indd 1 19/10/15 4:45 pm
Advance Praise
“Out-think! is a lucidly written book on introduction to game
theory and strategic thinking. I’m sure, decision-makers and func-
tional managers would find Out-think! really useful. Moreover, it
will certainly interest final year undergraduate and postgraduate
students of management, economics, politics and engineering.”
Sanjay Singh, Professor, IIM Lucknow
“This book introduces to the reader, a student or a practitioner,
how key strategic business decisions—Pricing, Market Entry,
Marketing, Recruitment, Negotiation, etc.—have underlying
principles based on Game Theory. One dedicated course does not
do justice to the principles covered. The book should be recom-
mended as a reference for various business courses because of the
case driven approach. As a practitioner the book acts as a refresher
to the various principles taught by Dr Sarkar, that I continue to
use in my professional life.”
Abhishek Kumar, Principal Consultant, Utilities Leader
E&E, APAC, Frost & Sullivan
“A wonderful mental workout for every strategist, game theory
professor and aspiring CEO. Full of paradoxes, puzzles and flashes
of insights. I am sure this book can cross over from being used in
the classroom to keeping the mind ticking in the airport lounge.”
Dr Rohit Prasad, Associate Professor, MDI Gurgaon

OUT-THINK!

OUT-THINK!
How to Use Game Theory
to Outsmart Your Competition
SUMIT SARKAR
Copyright © Sumit Sarkar, 2016
All rights reserved. No part of this book may be reproduced or utilized in any form
or by any means, electronic or mechanical, including photocopying, recording or
by any information storage or retrieval system, without permission in writing
from the publisher.
First published in 2016 by
SAGE Response
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Published by Vivek Mehra for SAGE Publications India Pvt Ltd, typeset in
11/13 pt Bembo by Diligent Typesetter, Delhi and printed at Sai Print-o-Pack,
New Delhi.
Library of Congress Cataloging-in-Publication Data
Sarkar, Sumit (Economist), author.
Out-think! : how to use game theory to outsmart your competition / Sumit
Sarkar.
pages cm
Includes bibliographical references and index.
1. Game theory. 2. Decision making. 3. Strategic planning. I. Title.
HD30.26.S26 658.4’033—dc23 2016 2015032507
ISBN: 978-93-515-0563-1 (PB)
The SAGE Team: Sachin Sharma, Guneet Kaur Gulati, Apeksha Sharma,
Nand Kumar Jha, and Ritu Chopra
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This book is also available as an e-book.
Contents
List of Case Studies ix
Preface xi
Acknowledgements xvii
1. What Managers Can Learn from Game Theory? 1
2. Business and Chess: Looking Forward, Reasoning
Backward 9
3. Prisoner’s Dilemma 31
4. Coordination and Anti-coordination Games 48
5. Strategic Moves: Threats, Promises and Commitment 70
6. Trust, Credibility and Collusion in Repeated Games 89
7. Business Poker: Playing Games with Limited
Information 115
8. Smart Negotiations 164
Epilogue 201
Bibliography 206
Index 210
About the Author 214