Game Theory in Marketing
Many new products are typically discovered through marketing. However, can companies improve their marketing strategies through use of game theory? In order for game theory to be completely successful, all factors affecting the outcome must be known. This becomes a problem when applying game theory to marketing. Humans are unpredictable. Even if companies use game theory to create a marketing campaign that has a good expected response, the actual outcome of the campaign may vary due to the human element.
In his article, Nick Chowdrey suggests ways to influence customers to go down controlled paths: “The trick is to rationalise the consumers’ decisions as much as possible”. Controlled paths are more likely to result in expected decisions based on game theory. Chowdrey explains a technique that learns what consumers’ interests are and guides them down a path to products that are based on what they are most likely to buy. This strategy gives game theory a better chance of working but still cannot completely remove the human element.
http://www.marketingmagazine.co.uk/article/1309753/playing-game-theory-marketing-tool