Uploaded July 2017 | Updated September 2026, 1 day ago
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This lesson on Game theory discusses the prisoner's dilemma and Nash's equilibrium.
Hope you will enjoy the video! Here's a link to the full course on Udemy:
udemy.com/course/mba-in-a-box-business-lessons-from-a-ceo/?referralCode=F6026A89249995D14BCD
This video is part of a series of short lessons about Business Strategy. The complete module can be found on Udemy, as a core part of the MBA in a Box course by CEO Valentina Bogdanova and 365 Careers.
The course provides a complete Business Education: Business Strategy, Management, Marketing, Accounting, Decision Making & Negotiation in just under 10 hours.
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Strategy module table of contents:
MBA in a Box: Introduction
1. What does the course cover?
Section: 2
Strategy: An Introduction
2. The role of Strategy and what makes a Strategy successful
3. The difference between Corporate and Business Strategy
4. The importance of the Mission, Vision, Goals, and Values statements
Section: 3
Strategy: The industry lifecycle model
5. The four stages of the industry lifecycle model - An introduction
6. The strategic importance of the industry lifecycle model
7. The Introduction stage - A new industry is born
8. The Growth stage - An industry in its expansion phase
9. The Maturity stage - An industry at its peak
10. The Decline stage - An obsolete industry
Section: 4
Strategy: Porter's Five Forces model - The competitive dynamics in an industry
11. Michael Porter's Five Forces model
12. The threat of new entrants
13. The threat of substitute products
14. The intensity of current competition
15. The bargaining power of suppliers
16. The bargaining power of clients
17. Porter's Five Forces framework applied in practice
Section: 5
Strategy: Game Theory - Studying the interaction between multiple parties
18. An introduction to Game Theory
19. Zero-sum games - approaching situations with a win-lose perspective
20. Non-zero-sum games - considering both cooperation and confrontation
21. Tobacco companies - a real-life example of Game Theory application
Section: 6
Strategy: Focusing on the inside of a business
22. Focusing on the inside of a business - An Introduction
23. A company's lifecycle model - what should be done at different stages
Section: 7
Strategy: Acquiring a competitive advantage
24. The quest for a competitive advantage - An Introduction
25. The importance of building a sustainable competitive advantage
26. The role of resources and capabilities
27. Acquiring an actual competitive advantage
Section: 8
Strategy: The three main competitive strategies
28. The three main competitive strategies
29. Cost leadership - sell cheap
30. Differentiation - be different
31. Niche (Focus) strategy - find your niche market
32. The danger of hybrid strategies
Section: 9
Strategy: Corporate growth strategies
33. The types of growth opportunities companies pursue
34. Organic growth - building a solid foundation
35. Inorganic growth - leveraging M&A transactions
36. Horizontal integration
37. Vertical integration
Section: 10
Strategy: The SWOT analysis framework
38. An introduction to SWOT analysis
39. SWOT analysis in practice - Starbucks
--------------------------------
Most real-world situations are not zero-sum games, with a clear optimal choice. In a zero-sum game, both parties have a preferred outcome. They want to win, and there are no doubts.
A non-zero-sum game is different, because it allows participants to choose whether they want to cooperate or to compete. Remember, the two players can have common and opposing interests at the same time.
The most classic example of a non-zero-sum game is the prisoner’s dilemma. Here, two players must decide what they will do, and the outcome for both depends on their own actions.
So, we have two criminals arrested, suspected in a robbery. Police officers hold the two criminals in different interrogation rooms and offer them the following options:
If one of them confesses the crime and the other one doesn’t, the one who’s confessed walks away free, while the other one receives a 10-year sentence.
If both confess, they will receive a 5-year sentence each. And if neither one confesses, they will both walk away free.
The optimal global solution is to deny confessing; however, given that prisoners cannot communicate, they will choose a solution optimizing their own utility.
John Nash, the famous Nobel prize winner portrayed in the movie “A beautiful mind” came up with a solution known as Nash’s equilibrium. He proved that, if a player in the context we described earlier has chosen a strategy and other players can’t benefit by changing their strategies, then we would have an equilibrium.
On Facebook: facebook.com/365careers
On the web: 365careers.com
On Twitter: twitter.com/365careers
Subscribe to our channel: youtube.com/365careers
This lesson on Game theory discusses the prisoner's dilemma and Nash's equilibrium.
Hope you will enjoy the video! Here's a link to the full course on Udemy:
udemy.com/course/mba-in-a-box-business-lessons-from-a-ceo/?referralCode=F6026A89249995D14BCD
This video is part of a series of short lessons about Business Strategy. The complete module can be found on Udemy, as a core part of the MBA in a Box course by CEO Valentina Bogdanova and 365 Careers.
The course provides a complete Business Education: Business Strategy, Management, Marketing, Accounting, Decision Making & Negotiation in just under 10 hours.
--------------------------------------------------
Strategy module table of contents:
MBA in a Box: Introduction
1. What does the course cover?
Section: 2
Strategy: An Introduction
2. The role of Strategy and what makes a Strategy successful
3. The difference between Corporate and Business Strategy
4. The importance of the Mission, Vision, Goals, and Values statements
Section: 3
Strategy: The industry lifecycle model
5. The four stages of the industry lifecycle model - An introduction
6. The strategic importance of the industry lifecycle model
7. The Introduction stage - A new industry is born
8. The Growth stage - An industry in its expansion phase
9. The Maturity stage - An industry at its peak
10. The Decline stage - An obsolete industry
Section: 4
Strategy: Porter's Five Forces model - The competitive dynamics in an industry
11. Michael Porter's Five Forces model
12. The threat of new entrants
13. The threat of substitute products
14. The intensity of current competition
15. The bargaining power of suppliers
16. The bargaining power of clients
17. Porter's Five Forces framework applied in practice
Section: 5
Strategy: Game Theory - Studying the interaction between multiple parties
18. An introduction to Game Theory
19. Zero-sum games - approaching situations with a win-lose perspective
20. Non-zero-sum games - considering both cooperation and confrontation
21. Tobacco companies - a real-life example of Game Theory application
Section: 6
Strategy: Focusing on the inside of a business
22. Focusing on the inside of a business - An Introduction
23. A company's lifecycle model - what should be done at different stages
Section: 7
Strategy: Acquiring a competitive advantage
24. The quest for a competitive advantage - An Introduction
25. The importance of building a sustainable competitive advantage
26. The role of resources and capabilities
27. Acquiring an actual competitive advantage
Section: 8
Strategy: The three main competitive strategies
28. The three main competitive strategies
29. Cost leadership - sell cheap
30. Differentiation - be different
31. Niche (Focus) strategy - find your niche market
32. The danger of hybrid strategies
Section: 9
Strategy: Corporate growth strategies
33. The types of growth opportunities companies pursue
34. Organic growth - building a solid foundation
35. Inorganic growth - leveraging M&A transactions
36. Horizontal integration
37. Vertical integration
Section: 10
Strategy: The SWOT analysis framework
38. An introduction to SWOT analysis
39. SWOT analysis in practice - Starbucks
--------------------------------
Most real-world situations are not zero-sum games, with a clear optimal choice. In a zero-sum game, both parties have a preferred outcome. They want to win, and there are no doubts.
A non-zero-sum game is different, because it allows participants to choose whether they want to cooperate or to compete. Remember, the two players can have common and opposing interests at the same time.
The most classic example of a non-zero-sum game is the prisoner’s dilemma. Here, two players must decide what they will do, and the outcome for both depends on their own actions.
So, we have two criminals arrested, suspected in a robbery. Police officers hold the two criminals in different interrogation rooms and offer them the following options:
If one of them confesses the crime and the other one doesn’t, the one who’s confessed walks away free, while the other one receives a 10-year sentence.
If both confess, they will receive a 5-year sentence each. And if neither one confesses, they will both walk away free.
The optimal global solution is to deny confessing; however, given that prisoners cannot communicate, they will choose a solution optimizing their own utility.
John Nash, the famous Nobel prize winner portrayed in the movie “A beautiful mind” came up with a solution known as Nash’s equilibrium. He proved that, if a player in the context we described earlier has chosen a strategy and other players can’t benefit by changing their strategies, then we would have an equilibrium.
