Applications of Game Theory
One possible application of Game Theory is in advertising. Advertising involves the promotion of products and services so as to expose the product or service to a greater number of people. The goal of advertising is to make more people aware of a company's product or service so that more people would avail of this product or service, and this would mean more revenues for the company. One way that a company can approach this goal is to expand the current market of consumers. This would entail directing promotional activities to consumers who have never tried the product or service or anything similar to it. Another way is to target the current market in the hopes of increasing market share. This means that there is a base of consumers currently using the product or service, but there are other companies offering the same product or service, and the company would like to increase the percentage of people availing of their particular company's product or service. This is the case where game theory is applicable. There are other entities that a company can consider as competitors. The company competes with these entities for a share of the market. These entities include other companies who produce the same p
In conclusion, game theory may still be useful in giving us a framework with which to analyze the decision making process in competitive situations. roduct or the same service. Other potential competitors are companies that produce substitutes or complements to the product or service, new entrants to the industry, suppliers of the company, and distributors of the company. To apply game theory to advertising, the adversaries must first be defined. First of all, there is the company itself. Next is their main direct competitor. Other adversaries may include smaller competitors, companies producing substitutes or complements, new entrants, suppliers, or distributors. Once this is done, the strategies of each adversary must then be defined. Assuming that the adversaries must decide how much advertising money to spend in a certain region, the adversary's strategy then would involve deciding how much advertising money to allot to each region. Certain companies might have stronger influences or name-recall in certain regions, so a competitor must decide how much money if invested in that region, would result in greater market share. After defining each adversary's strategy, payoff
Some common words found in the essay are:
Game Theory, product service, game theory, market share, advertising money, theory advertising, GAME THEORY, game theory advertising, product service people, company's product service, competitive situations, real life, size market, competitors companies, current market,
Approximate Word count = 803
Approximate Pages = 3 (250 words per page double spaced)
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