Game theory in business

The Princeton Investigator, John nash, won the Nobel Prize in economics for his work in the field of game theory, a method of strategic thinking. Nash was portrayed by Russel Crowd in the 2001 film, A Brilliant Mind.

Fortunately, you don't need a Ph.D. in economics to apply game theory to your company or to business in general.

Considering that a salary increase for a worker means adjusting the salary of other people, there are more people involved than you might think at first, and it's more complicated than one-on-one negotiations one.

The more people involved, the more difficult it is to negotiate, so it is recommended break up negotiations one by one instead of trying to deal with all the people at once.

To get a higher salary using game theory in negotiations you should try minimize risk, make the first offer, have credibility, maintain continuity and have a reciprocal relationship with the other person.

First of all, the other person has to need your services, since you cannot receive a salary increase just because you want it. But if you are ready for a raise and the managers are willing to discuss it, in negotiations, you can work with the

chain of possible answers on the other side and have a counter-argument ready for each one. You must know your bargaining partner well and understand the path necessary to find the optimal amount you are looking for.

Make money in the markets

The use of Risk arbitrage in order to make a profit is a way to exploit game theory in the markets.

Suppose that company A (the "buyer") offers to exchange one of its workers for every two shares of company T (the "target"). Shares of A sell for $ 50 per share and B's actions Do you sell for 20 dollars per share before the offer. Therefore, all of T's shareholders must accept the deal, and the value of B's ​​shares should rise to 25 dollars. If T's shares rise to just $ 24, a merger arbitrage opportunity presents itself. Investors can buy two shares of company T for 48 dollars, cut a share of company A to get 50 dollars. They can then trade their two T shares for one A to get $ 2 of risk-free profit.

Risk arbitrations, or merger arbitration, are the simultaneous purchases of shares of a company that have announced that it is going to be acquired together with the

Did you like these two ideas to be able to apply one of the most brilliant theories of economics to your benefit? If you use it correctly, you can earn a lot of money.

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