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The Strategic Games Matrix (SGM) as a new tool for strategic management via game theory.

Sistemas & Gestão 01/2006;
Source: DOAJ

ABSTRACT This paper develops and presents some original game theory concepts utilizations for the formulation of company’s cooperative and competitive strategies, having as basis the Strategic Games Matrix (SGM). The concepts and results from SGM are applied to analysis and formulation of entrepreneurial strategies, as a support tool to complex business structures strategic management – hierarchical or not – and for competitive and/or cooperative strategies, or a combinations of those. It is proposed a new typology for business strategic games derived from an analysis and interpretation of the SGM: Four classic strategic games types from game theory – Nash, Minimax, and Pareto, as non-hierarchical games, and Stackelberg, as a hierarchical game – are interpreted and applied to some conflict of interests situations; two new hierarchical strategic game types, applicable to limit-case situations, also derived from the SGM analysis – Dominant-Marginal, and Paternalist-Solidary – are also described and applied. A new methodology for analysis and design of competitive and cooperative strategy formulation for complex hierarchical structures strategic management, based on the SGM, is presented and applied to three level hierarchical games. The concepts of strategic scene-gaming, and of strategic dynamic positioning, are also introduced and illustrated.

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    ABSTRACT: The increasing scarcity of water resources in several regional and country scenarios is progressively assuming alarming significance for policymakers, businesspersons, community leaders, and researchers, considering the multi-user conflicting interests covering relevant social, economic, political and environmental aspects, involving issues as wide as human consumption, irrigation, process industries, fishing, hydroelectricity, tourism, transportation, flora and fauna preservation, flood control, recreation and leisure, environmental protection and pollution control. Historically, these conflicting stakeholders have been treating this subject mainly as a disputing issue, competing for these vital resources, or in a few cases, cooperating to find negotiable solutions. This paper proposes a general framework for multilevel multi-stakeholder water resources management strategies modeling using the Strategic Games Matrix (SGM), and applies it to the Lake Päijänne Case (Finland) regulation problem, originally described and treated by Hämäläinen, Kettunen, Marttunen & Ehtamo (2001). Four classic strategic games (Nash, Minimax, Pareto, and Stackelberg), mapped on SGM cells, are interpreted and applied to model conflicts of interests among the stakeholders; additionally, two hierarchical strategic limit-cases games (Dominant-Marginal, and Paternalistic-Solidary), also mapped on SGM cells, are similarly described and applied. Our methodology describes and applies the SGM to support the formulation of the Lake Päijänne regulation management strategies for the competitive and cooperative multilevel multi-stakeholder conflicts of interest treatment. 2
    Academy of Management 2006 Annual Meeting, Philadelphia; 08/2006

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