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Game Theory in Business Decision-Making: A Strategic Approach to Competitive Market Dynamics

Year: 2025

Type: article

Abstract: In the complex and competitive landscape of modern business, strategic decision-making plays a pivotal role in determining success. This paper explores the application of game theory in business decision-making, focusing on its utility in competitive scenarios such as pricing strategies and market share battles. In this paper, the Bertrand Competition Model, Cournot Competition Model and further extended model are introduced and put into test in the American Express delivery market which is led by FedEx, UPS and USPS. The main finding is that the real market is not ideal competitive, price adjustment delay and brand premium exist. Under the Bertrand model, the price tends to be equal to marginal cost which is not realistic in the real market.

Source: Academic journal of management and social sciences

DOI: 10.54097/e0wchb25

Authors: Haoyang Liu, Haonan Wu

Institution: University of Manchester

Language: English

Topic: Merger and Competition Analysis

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

Open Access status: diamond

OpenAlex ID: W4409421272

FWCI:

Cites: 6

Cited by:

Related to: 10