Name of the Game - I

Business is a good game – lots of competition and a minimum of rules. You keep score with money. Atari Corporation founder Nolan Bushnell

With these lines, I begin a journey to the flamboyant world of business games where the dice throbs to the tune of sheer shrewdness. It is immaterial whether the player has the most coveted degrees up his sleeves. What really matters is the amount of cunningness and tact one can employ to emerge victorious. While we talk about “innovating at the frontier”, we must understand that the boundary demarcating the level of practicality from that of madness consummates at what can be equated with the Horizon. In order to step upon a smooth transition, transient though, from the former to the latter and vice versa, one should be extremely quick at judging the sensitivity of the either.

Well, innovation must never stop at any milestone for it is a lasting process. As the player buckles up his shoes to jump into the arena, he must realize that it’s the magnitude of his sheer persistence that will ultimately see him through. He should have hardened his soul with innumerable sessions of practice beforehand, just to get the right kind of feel of what awaits him. As with any business management student, the concept of defining theories and testing hypotheses are not the only avenues to achieve the prowess of a visionary. The most important skill he needs to improvise on is the ability to sense and sniff. The sensory reactivity of the player to an impending problem would eventually fetch him the most optimal solution. This very aspect has to be ingrained in the individual from a very tender age when the mind is at it’s receptive best. The Shaolin brand of martial arts schools absorb the students when they are in the age of infantile celebration. The students are gradually exposed to various degrees of physical and mental endurance techniques that subsequently sharpen their ability to concentrate.

The same applies to the students pursuing management degrees. In order to be able to get a good grasp over the chaotic deliberations of the stock market or the meshed locales of supply chain system, they need to have a pre-cognitive understanding of the happenings there. They need to have played games in the same spirit as that of a teenager drooling over a pokemon or an age of empires. Only the structure of the game is a little different wherein the settings are inherently realistic not fantastic.

One such investment game is the “Money Exchange Game”. Two players move in sequence. Player1 has an initial monetary endowment A. Player1 decides the amount x of A to transfer to Player2. The transfer x is a productive investment; it increases by a multiple R (larger than one) before reaching Player2. Then, Player2 decides how much of a of Rx to return to Player1. Player1 leaves with A-x+a and Player2 leaves with Rx-a. If Player1 initially has $10 and decides to transfer $5, Player2 would receive $15. If Player2 decides to return $8 out of the $15, the final pay-off of the players are $13 and $7 respectively.

Similarly, I’d like to propose another game aptly titled the “Gift Exchange Game”. Like the previous one, here two players move sequentially. 1 has to propose a wage w in a given interval. 2 can accept or refuse. If he refuses, both players get a zero pay-off. If he accepts, he has to choose a costly effort e. Then, the game is over and the 1st player gets a pay-off Re-w, while the second gets w-c(e), where c is the cost of the effort. The transfer or investment in the earlier game is replaced by the commitment of the 1st player to pay a wage w., irrespective of the effort of the 2nd player. The return payment is replaced by the effort e and its cost c(e) to the 2nd player. The opportunity for both the players is represented by the productive factor R. Like the Money Exchange Game, a rational selfish 1st player should anticipate a minimum effort of the 2nd player and should promise a minimum wage. With minimum wage, effort and cost of zero effort all equal to zero. Both players get zero equilibrium pay-off.

The games present a very good platform for the management students to employ their grey matter to achieve optimality in all instances.