Game Theory Discussion

A good example was when my firm used game theory while bidding on a government

contract. The company sought a contract, with Firm B being the closest rival. Both firms

exhibited bidding strategies that necessitated the need for game theory. That is, both firms

evaluated the actions of the other before making the next move in the bidding process (Ozka et

al., 2021, p.13380. Therefore, the relationship between my company and the rival was strategic.

This assertion is because any action of the rival meant an adjustment to the existing bidding

process. The goal was to predict the probable actions of the rival before making necessary

changes that would attract bidding success.

Game theory has experienced instances of threats and commitment that have changed the

trajectory of the bidding process. The commitment of Firm B to offer low prices as part of the

bidding process triggered competitive techniques (De et al., 2018, p. 3527). The reaction was to

the threats presented to my company as part of the bidding process. Changes in the commitment

of the rival firm appeared as a threat that needed possible solutions.

The bidding process also witnessed first-mover and fast-second techniques by

organizations to attain bidding rights. First-mover companies are those that submit their bid first

to increase their chances of selection by the government. First-movers are renowned for shaping

the competitive landscape of any operation. Firm B, during the bidding war, was a first-mover.

Aside from the bidding process witnessing first-movers, some companies exhibited a fast-second

strategy. These firms scanned the environment before deciding to participate in the nodding war.

In the bidding scenario, game theory helped the company strategize effectively by

evaluating the technical requirements and pricing to win a government contract.

References

De, G., Tan, Z., Li, M., Huang, L., & Song, X. (2018). Two-stage stochastic optimization for the

strategic bidding of a generation company considering wind power

uncertainty.8Energies,811(12), 3527. https://doi.org/10.3390/en11123527

Özkan, E., Azizi, N., & Haass, O. (2021). Leveraging smart contract in project procurement

through DLT to gain sustainable competitive advantages.8Sustainability,813(23), 13380.

https://doi.org/10.3390/su132313380