- This topic has 6 replies, 4 voices, and was last updated 2 weeks ago by
.
- Posts
The text says that one of the principles of game theory is that:
“If a strategy exists that allows a competitor to dominate us, then our priority is to eliminate that strategy.”
I looked it up on Google but still couldn’t understand this.
Shouldn’t we take up that strategy in order to dominate that competitor. What do they mean by eliminate that strategy.
If their strategy dominates us, eliminating that strategy will stop that domination. Domination of the competitor is not necessarily possible.
So is it correct that eliminating that strategy means implementing a better strategy than the competitor or matching up to the competitor.
But how is this question applied to the prisoner’s dilema.
The prisoner’s dilemma is when two parties, acting in their own self-interests, do not produce the optimal outcome. Parties choose to protect themselves at the expense of the other participants. As a result, both participants find themselves in a worse state than if they had cooperated with each other in the decision-making process.
For example, say that a number of companies are competing and have agreed to form a cartel, fixing the selling price of their identical product. Let’s say at $100/unit. They all do reasonably well.
However, one party breaks ranks and sells at $80. Customers will flock to that seller, whose volume will increase and who can look forward to higher profits. The party who dropped the price was trying to eliminate the cooperative, price-fixing strategy.
Other suppliers see this and also reduce their prices to $80.
They all end up doing worse than if they had cooperated and kept selling at $100.
- Topics: 0
- Replies: 2
- ☆
Thx for info
- Topics: 0
- Replies: 2
- ☆
The key idea here is that if there’s a strategy your competitor can use to beat you, then your goal should be to make sure that strategy no longer works against you — in other words, you need to “eliminate” it as a threat.
That doesn’t necessarily mean you literally destroy the strategy. Instead, it means you adapt your own strategy or change the rules of the game so that the opponent’s winning move no longer gives them an advantage. For example:
In business, if a competitor’s low prices are hurting you, you might “eliminate” that advantage by improving your product, offering something unique, or finding a better pricing model.
In chess, if your opponent has a strong opening that always puts you at a disadvantage, you could learn specific counter-moves to neutralize it – eliminating its effectiveness.
So while “taking up that strategy” is one possible approach, the quote is talking about defending yourself by removing its power to harm you.
If you’re interested in more practical examples of strategy and game theory, you might want to check out https://rewazea.com/ – they share useful insights on competitive thinking and decision-making in real-world scenarios.
Hope that clears things up!
- You must be logged in to reply to this topic.