Applied game theory in business

Lewiscoaches

Dec 10, 2020·3 min read

In strategic planning, it is essential that you use resource allocation of your available resources. This is especially so in human resources, especially in the near term, to achieve goals for the future. It is the process of allocating scarce resources among the various projects or business units in difficult times that will help you to survive and prosper.

There are a number of approaches to solving resource allocation problems. Resources can be allocated using a manual approach or there is inexpensive software available. Of course one can always choose a combination of both.

A simple process is to simply create contingency mechanisms such as a priority ranking of items excluded from the plan, showing which items to fund if more resources should become available and a priority ranking of some items included in the plan, showing which items should be sacrificed if total funding must be reduced.

Using software built around resource allocation algorithms

Resource allocation may be decided by using computer programs applied to a specific domain to automatically and dynamically distribute resources to applicants.

This is especially common in electronic devices dedicated to routing and communication. For example, channel allocation in wireless communication may be decided by a base transceiver station using an appropriate algorithm.

One class of resources is where applicants bid for the best resource(s) according to their balance of “money”, as in an online auction business model (see auction theory which was awarded a Noble Prize in 2020). A study by Emmanuel Yarteboi Annan shows that this is highly important in the resource allocation sector.

Final Thoughts

There are many areas in business where allocative efficiency can be the determining factor for success or failure. These include…

· Earned value management

· Collective problem solving

· Earned value management

· Prioritization

· Project management

· Project planning

· Resource planning (disambiguation)

· Stochastic scheduling

Without an understanding of how to leverage and allocate resources, it is unlikely your business can survive and prosper in the long run. This requires common sense.

To explore more of these ideas and some of my longer pieces on resource allocation and applied game theory please visit my website and sign up for my free newsletter.

I’m the author: I am a game theorist and a teacher on peak performance. I am also a results-oriented self-improvement coach offering advice for innovators of all levels.

I am always exploring trends, innovations, areas of interest, and solutions to build new stories upon. Again, if you have any ideas you would like me to write about just email me at LewisCoaches@gmail.com

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