Monday, November 21, 2011

How To Play Without Shedding Our Own Blood?????? "Game Theory"




Competition!!!!!!!!!! Where did it start? It started when we were in the womb of our mother. We all came to this battle field (earth) by annihilated millions of sperms. That's the place actually fighting started. The reasons for all the fights are 'showing the supremacy' and 'for the survival'. We all know what will happen at the end of the fight. Blood shed all over the place and look like a hell. The winner stands and the loser drops off. Is there any way to win the fight without shedding blood???

The book Blue Ocean Strategy says "How to create an uncontested market space and makes the competition irrelevant". This means how to move from the ocean which is red because of the vigorous competition to the ocean which blue where there is no blood and no competition. In the above scenario, we may be a Mahatma but    our competitors are not. They will imitate our strategy and make our blue ocean again a red ocean.

An another way is there to handle this. Here we won't shed the blood but we make our competitor to shed the blood. This strategy is possible if and only if we know about our competitors thoroughly. We have to have knowledge about the competitor's each and every micro move they make. What do they think? Are they thinking the same what we think? OR Are we thinking the same way what they think? If both of us think in the same way, then surely there will be blood all over the market. How to have a rational thinking that the competitor won't think? How to get a success by knowing what the competitors thinking? 

There is an economic concept is there "GAME THEORY- This theory is about making rational decision by analyzing all the outcomes and by selecting the best suitable outcome which make us to survive and may or may not help the competitors. This also talks about two kinds of decision making "Simultaneous"(taking decisions simultaneously as with our competitors) and "Sequential"(taking decision after the decision which is taken by our competitor)  The vital point here is the rational decision won't let us down". Prisoners Dilemma which explains about game theory. This talks about the rational decision making behavior of the two prisoners.

Yesterday, I was watching a movie "THE GOOD, THE BAD AND THE UGLY" a cowboy movie. In the climax they implemented the game theory. What was the thinking of the three guys (the good, the bad and the ugly). The director beautifully showed the scene how they were rationally thinking in the verge of death. 

The scene is, three of them found a treasure. They didn't want to split the treasure into three. Now the battle began. Think about an equilateral triangle, each one of them standing in the three points of the triangle and each one having a gun. Will you able to judge what were they thinking? Can you think how many possible ways each one think by killing the other two to get the treasure? 

Who will win? They guys who pulled the trigger first or the guy who pulled the trigger last or the guy who runs off or guy who stands still or is there any possibility of any one of them killing the other two or etc.,the list goes on.................

Think rationally. What is the best decision can one take in that scenario to protect himself and to get the treasure? Analyze the outcomes and select the best possible outcome and make a decision.

Are we rational or irrational in decision making? Think about how many rational and irrational decisions we made 1:100. May be even more 1:200 or even more. But in corporate there is no place for irrationality.

Watch the movie "The Good, The Bad and The Ugly". There are two kinds of people in the world "one is rational and other is irrational" . 


Which one are you???????????

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