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CDPSG3[CO] Ch3 – Game Theory & Ch9 – Being Ready for Change, G3 (IBS…
CDPS
G3
[CO] Ch3 – Game Theory & Ch9 – Being Ready for Change
How you gains in game?
depends on your power as well as your competitor's power
determine by the structure of the game
game theory shows how to quantify this power
Rules
Different Rules
Free-form
no negotiation
the price is fixed
Post price
take-it-or-leave-it
retailers
Last-look
Choose the best profit for own company
More rules more implications
Rationality and Irrationality
"rational man" doesn't apply to the real world of business
Business are seldom zero-sum
succeed together or fail together
Each has to be concerned about the other's rationality
What Rationality Is - and Isn't
The difference in information leads to a difference in perceptions, even to misperceptions
people can be rational and yet evaluate the same outcome quite differently
:green_cross: People are quick to deem others irrational when they see them doing crazy things
:check: Work harder at seeing the world as the other person sees it
Most important is remembering to look at a game from multiple perspectives
Allocentrism
rules
perceptions
Put yourself in the shoes of other players to
anticipate reactions to your actions
understand how they see the game
assess how valuable you are to them
added value
Challenge
how can you pretend that you don't know what you know
Solution
find someone to assist you
example
a company sets up two teams
1.company strategy
2.competitor
no advanced information about the strategy
the respond is not often anticipated
Conclusion
Most of the time it helpful to you, bit not always
the story of Crazy Driver
3.6 the Elements of a Game
PARTS
P
layers
competitors
complements
customers
suppliers
A
dded Values
Who has power
Who will get the big payoff
R
ules
custom
contract
law
T
actics
Perceptions
Perceptions of perceptions
Perceptions of perceptions of perceptions
S
cope
Bing Ready for Change
A Checklist of Change
PARTS
The 'bigger' 'bigger picture'
Key to success
adapting the daulity
cooperation
competition
Changing the game of business
giving suggestions
ways to make the pie bigger
ways to changing the game
challenging the status quo
do differently and better
Game theory
began as a branch of applied mathematics
analyzes situation in which people's fortune are interdependent
provides a systematic way to develop stretegies
game theory obstacle
game theorists are often unfamiliar with business practice
mathematics can be baffling and stops people from connecting the theory to pratice
communication between the worlds of game theory and business pratice is both possible and valuable.
Perception
Player's perception
Different people view the world differently
People find the different when they did
Texas Shoot-Out
You don’t know what the other person will do
the best way
Half of the pie
example
two kids with a pie
Venture worth
Know your partner think
Encourage your partner to shoot first
Artistic Differences
the role of perceptions in negotiations
Card game
Adam
Adam got 26 black card, each of students got one red card
Adam need student as much as student need Adam
you can be the last one negotiate with Adam,as well as everyone can do that.
a 50/50 split is the most likely outcome
Barry
Barry got 23 black card , 26 students got red card.
The strategy employed by video game giant NIntendo and made a lot of money more than Adam and Barry
students holding red card is a bad idea, there will be three student ending up with nothing.
because there are only 23 black, any student who doesn't agree to Barry's term faces the propect of being left out.
RULE
How to win-Turn in a pair of cards(red/black), once you got a pair of card ,tou can gets$100.
need to negotiate with the black card owner,each of students got red card
student can't get together and bargain as a group with black card owner.
Added value
take the size of the pie when you and everyone else are in the game then see how big a pie the other players can create without you
your added value
the size of the pie when you are in the game-the size of the pie when you are out of game
what you can take away from a game is limited by what you bring
so don't count on getting more than your added value
Card game application
Adam
the sum of added value is $5,200- Adam's $2600 plus $100 of 26 students
Barry
Barry's added value ~$2,300, students added value~$0 (because three students are going to end up without a match,any student can be the on of three student)
common errors of added value
look at only half of the equation.
ex. without Adam's ,students get nothing. we only consider our fallback option and ignore Adam's fallback option.
thinking in terms of added value helps you see the strength of your position
but Adam's fallback is really no better than students, thy are in the equal position
be sure to consider how much the other players are willing to pay to have you in the game
2.confuse your individual added value with the larger added value of a group of people in the same position as you.
ex.if students get together,Barry's added value will be~$0，because added value as a group of students is equal to the whole pie
what your added value
to look back and figure out what your added value was in some situation is the ultimate nihilistic experence
so don't doubt about your value,everyone have their own value
Boundaries
the scope of the game
Every game is linked to other games
misunderstanding the scope of the game will loss the game
EX: desktop printers
G3
IBS 107212043 彭竑愷 Josha
IBS 107212013 蔡亞諠 Jasmine
FIN 106214040 朱娩賢 Megan
IBS 108212505 葉尊瑩 Clare
PHD2 108245907 少彤 Elixir
Value Net
determine
not universal
multiple