The Right Game: Use Game Theory to Shape Strategy
Theory of Games and Economic Behavior
John von Neumann
Oskar Morgenstern
Rule based games "rules of engagement"
Free wheeling games no external contraints
For ever action there is a reaction
You can not take away more than you bring in
Focus on the choices of the other player(s)
Lose-lose to win-win
GM example WIN-WIN
Anticipate your competition
Greater chance new opportunities
Less resistance from competitors
Doesn't force competition to retaliate
imitation is beneficial
Game of Business
Creating Value
Capturing Value
Value Net
interact as transactions
Vertical Dimensions Company's customer and suppliers
Does not transact
Horizontal dimension are Substitutors and Complementors
Elements of the Game
PARTS
added values
rules
tactics
scope
Players
players are customers, suppliers, substitutors,
and complementors
what each player brings to the
game
a rule might arise
from law, custom, practicality, or contracts
shape the way players
perceive the game and hence how they play
the boundaries of the game
NetraSweet Example
TWA Example
Nintendo Power
Kiwi Air Lines
New Your Daily News
Sega Example
Traps of Strategy
Don't accept the game! You can change it
Don't think that changing must come at the expense of others. Look for cooperation
Don't think that you have to find
something to do that others can’t. Others will always imitate
Be sure to see the whole game.
What you don’t see, you can’t change.
Don't fail to think methodically
about changing the game.Be allocentric,
not egocentric.
"There is, after all, no end to the game of changing
the game"