Strategic Behavior And Game Theory

989 WordsJul 8, 20164 Pages
Introduction Strategic behavior and game theory coincide together in many ways. Strategic behavior plans happen within the confines of game theory. Silva, Mota, and Gril (2015) describe game theory and all that is involved with it as “one of the most powerful tools within social science in general and economics” (p. 421). With this statement, a deeper look into the measures that sum up strategic behavior and game theory is essential for an understanding of a firm’s decision in the global economy. Strategic Behavior Definition As oligopolists compete for advantages in their market, they must make decisions about the approach they take. Strategic behavior is the plan the oligopolist takes after understanding all of the measures that will go into the plan as well as the opportunity costs by not choosing other plans (Salvatore, 2015). These actions are taken into consideration by the competitors in the industry as well. They then must arrange or manipulate their plan in order to compete. Role in Economics Strategic behavior is what drives a company into a competitive market with the tools to be successful. If the leaders in a company do not take into account all of the criteria that establishes a strategic behavioral plan, they will not be able to compete in the industry at their highest potential. Ursacescu and Cioc (2015) describe the criteria that is incorporated into making strategic behavioral decisions such as operational intelligence, informational intelligence,
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