Strategic Decision Making in Uncertainty Based on Game Theory

Alireza Bahiraie; Hanieh  Mahmoudi; Zohreh Lashgari

doi:10.31436/ijema.v32i2.1163

Authors

Alireza Bahiraie Semnan University, Iran
Hanieh Mahmoudi Semnan University, Iran
Zohreh Lashgari Semnan University, Iran

DOI:

https://doi.org/10.31436/ijema.v32i2.1163

Keywords:

Game theory, Risk management, Equilibrium, Best response

Abstract

This article presents a new mathematical model based on game theory about government policies in company planning. We present suggestions to the government on how to provide facilities to companies to implement energy improvement systems. This novel model helps companies and governments to make strategic decisions in times of uncertainty and to enhance management and planning in financing companies. Using game theory, we model the government and the company's performance and introduce some of the parameters affecting their performance. By examining the game between them, the solution of the game theory, which is the equilibrium, is calculated and suggestions to improve their performance are given. The results show that this model helps decision makers and planners to have a more appropriate strategic planning process and choose a more effective strategy under uncertainty conditions.

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