Game Theory

Management > Crisis Management > Lectures > Independent Research > Game Theory > Nash equilibrium > Business Nash Equilibrium > Strictly dominant strategies > SDS for companies > IEDS

IEDS

One strategy for solving games (or making decisions in crises) is iteration elimination of domination strategies (IEDS), where strictly dominated strategies are removed, since rational players will not play them.

This results in a smaller game, where weaker strategies become stronger. These then are removed and the game gets smaller still. In the end, there is only one strategy for each player to take and a unique Nash equilibrium occurs.

With regards to business decision-making, this is stripping away dominant coping strategies and seeing what’s left and alternative methods of solution. Then strip away these until you get to the core of the problem. This should help stop managers making rash decisions and using SOPs to hide behind.

Minimax

Backward induction

Forward induction