Classification of 2X2 Games and Strategic Business Behavior

In: The American economist: journal of the International Honor Society in Economics, Omicron Delta Epsilon, Band 47, Heft 2, S. 78-85

Abstract

This note discusses the classifications of general symmetric and anti-diagonally symmetric 2×2 games, illustrated with business-related examples. It also shows how 2×2 games can be used to explain and interpret business strategies such as "top dog," "puppy dog," "fat cat" and "lean-and-hungry look" (Fudenberg and Tirole, 1984). A strategic move basically changes a prisoner's dilemma game, coordination game or chicken game into one with a unique Nash equilibrium that favors the strategic player.