Abstract
Thinking strategically is the focus of this chapter. The chapter includes references to Cesare Borgia, Machiavelli, Adam Smith, Napoleon, and Torstein Veblen. A Prisoners’ Dilemma situation and a Chicken Game are discussed to illustrate the essence of a game—with respect to understanding the functioning of markets. The example of Microsoft’s Internet Explorer challenging Netscape’s Navigator, by now historical, serves to demonstrate that in a strategic decision situation an agent cannot choose an outcome, independent of what the other agents do—in fact, a player chooses a strategy and not an outcome. Managers have to know game theory if they want to apply it to outsmart the competitor in strategic decision situations. An excursion into the world of neuroscience and mirror neurons concludes the chapter. Mirror neurons are of interest to strategic thinking as they serve as a mechanism of imitation in our brain and as a source of empathy.
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Notes
- 1.
Norbert Leudemann informed us that the original name of Augsburg is “Augusta Vindelicum.” In 15 BC, it was an army camp while the first civil settlement dated to 40 AC. The official name of the provincial capital was “Municipium Aelium Augustum,” abbreviated as “Aelia Augusta.”
- 2.
Not all managers are men as exemplified by one of the authors. We apologize exclusively using “he” in this text.
- 3.
From The Winner Takes It All lyrics by ABBA: “The winner takes it all/The loser’s standing small/Beside the victory/That’s her destiny.”
- 4.
For expected values, see Chap. 10.
- 5.
“Mirror neurons are a particular class of visuomotor neurons, originally discovered in area F5 of the monkey premotor cortex, that discharge both when the monkey does a particular action and when it observes another individual (monkey or human) doing similar action.” The authors “present evidence that a mirror-neuron system similar to that of the monkey exists in humans” (Rizzolatti and Craighero 2004: 169).
- 6.
V. S. Ramachandran, quoted by McGinn (2011:32).
- 7.
See Binmore (2017) for a discussion of the problems that result from applying the “small world decision theory” à la Leonard Savage to a “large world.” Rationality, defined for a small world, might not apply in a larger one.
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Holler, M.J., Klose-Ullmann, B. (2020). Playing for Susan. In: Scissors and Rock. Springer, Cham. https://doi.org/10.1007/978-3-030-44823-3_1
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