Abstract

Game theory has not been applied much to business strategy. I review some criticism of the game-theoretic approach which inhibits its application, and mention some others. The common criticism that game-theoretic models assume too much rationality is often wrong because (i) some games require little rationality to compute equilibria; and (ii) players may reach an equilibrium by communicating, adapting, or evolving to it rather than by calculating it. However, other criticisms can be forceful: Game theory is hard to use and test, it threatens to explain anything, it generates customized models of local settings rather than general regularities, and it offers only part of the advice a manager needs. Nonetheless, game theory could be a fruitful source of ideas and testable implications for strategy, requiring more fine-grained, longitudinal studies sensitive to interactions between structural variables.

Keywords

Game theoryBusinessMathematical economicsComputer scienceIndustrial organizationEconomics

Affiliated Institutions

Related Publications

Publication Info

Year
1991
Type
article
Volume
12
Issue
S2
Pages
137-152
Citations
194
Access
Closed

External Links

View on DOI.org

Social Impact

Altmetric
PlumX Metrics

Social media, news, blog, policy document mentions

Citation Metrics

194
OpenAlex

Cite This

Colin F. Camerer (1991). Does strategy research need game theory?. Strategic Management Journal , 12 (S2) , 137-152. https://doi.org/10.1002/smj.4250121010

Identifiers

DOI
10.1002/smj.4250121010