Game Theory as a Marketing Tool: Uses and Limitations

Abstract

The growth of complexity of the business environment in which firms operate, calls for more effective tools, able to consider the effect of the strategic choices of the actors of the market and to supply information useful for managerial decision process. Game theory seems to be an ideal candidate for this scope. Nevertheless, because of its axiomatic approach, its validity to highlight and define marketing issues has many critics. This paper analyses the main literature about the use of game theory for marketing management decisions and highlights its limits in this field in order to answer to the question: Can game theory be an effective marketing tool?

Keywords: Game theory, Marketing management, Rational choice in marketing

JEL Classification: C79, M31