Use of Game Theory in Executive Support System

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1 Use of Game Theory in Executive Support System Ashish Sharma, Sarika Jain Amity institute of information technology Amity University, Noida Abstract- In today s world competition in every business is increasing as compared to past. So as we can see in this competitive environment, top management or executive need much accurate and brief information about the market which can help them develop the strategy, they also need an accurate data to take short and long term decision. Executives are using every source of information which is available to them; but still executives are not getting better results as expected because there support systems are not changed according to their requirement so they can evaluate the data and take decision according to that. This paper is going to suggest using GAME THEORY in developing different type of game we can use also it in developing Support System for them because as we know games are developed according to every thought which a player can think and do. They think on every aspect of the player which a person can think and according to that they develop their strategy and decide that a strategy. So if we can use this concept to develop software then software s are helpful for the senior management teams to take better decisions and perform better than others. Index Terms- Game Theory, Executive Support System, Equilibrium Theory, MIS, KMS, DSS, economics I. INTRODUCTION Game Theory is a branch of mathematics related with analysis of strategies for deal with competitive situation where outcome of a contributor's choice of activity depends on activities of other contributors. Game theory is applied to conditions in business, engineering and mechanical. It will be viewed as a different side of science that deals with every field, and with a relatively larger amount of producers and consumers. In last few years, political economy has come up as a mixture of game theory and equilibrium theory where private sector Economy is presented by equilibrium theory, while voting conduct and the motivator of governments is examined utilizing diversion hypothesis. Issues contemplated incorporate assessment arrangement, exchange approach, and the part of worldwide exchange reports. Executive Support System is trying to help us to generate different types of the report so senior management can take decision on the basis of the report and make better decision using it. All the reports are used by senior management in taking big decisions in less time that means reports must be in a way which can show the way if they do something what will be happen or if they input some data then what will be outcome from future. These reports are generated by the data which is taken from the lower departments and from other system or software like knowledge Management System, etc. As a additional feature to provide fast access to the data ESS also can do that data entered into the system from the different source. Executive Support System also have another feature according to that feature we can access all the data which is stored in a well managed and sorted manner from any department or part of organization to generate reports. So we can take decision according to our convenience. If any Executive Support System is providing this feature then that software is much more useful for the top management of any organization because this feature allow top management to see what will be the future effect of the their decision and how will it affect market and what affect it will make on organization. This system will not tell use future but help us to know what the possible outcomes from their decisions are. There are many things which can affect strategy of any organization. First is every organization wants to be the best in their field, for that they do many things like reduce the price; maintain the quality of the product and services. Second thing is they wants to keep their profit and turn over always better than last accounting year and to do this they try to reduce their expenses by making changes to the their management and making their system better so they can make more products in less time which increases their revenue. Sometimes they IJIRT INTERNATIONAL JOURNAL OF INNOVATIVE RESEARCH IN TECHNOLOGY 66

2 decrease the no of employees and keep only those employees who perform. 3. Information available while player choosing their actions 4. Description of the results of action taken by a player for every possible combination of action chosen by players playing the game. 5. Details of player s preference over the payoffs. II. RELEVANT WORK As we know that game theory will be applicable to every field which is known to mankind and many researchers and scientist had already used it in different fields from biology to astrology. Let s take an example in which we can say that there are 2 players which represent two different organization and as like to persons or players have some distinct specialties same as all organization also have these quality and same as we predict how there two players perform we also find out that how will they two or more than two organization will perform or take their long and short term decisions. As we study two people as they take decision and perform same as that we can pursuit organization and find out how will they take their decision and according to this an organization will decide their long term and short term target because now using the game theory we will know all the possibility of decisions which an organization can take buy this we can take better decision for our organization then we can perform better in the market than other organizations and it will also increase the profit of our organization and then it will take our organization to the top. We will use game theory in Executive support system to take better output from MIS, DSS and KMS and use them in the ESS it will also help in the develop a strategy for a particular opponent organization and perform better than in the market. The 5 elements in a game: 1. Players : number of players and nature of role 2. In the game what a player can do or set of action which a player can take Game theory can also help in knowledge creation. It also helps in selecting necessary information and also removes a big amount of useless data which can help our system to perform in much better way and faster. If we have right information about the market then we will work in right direction and then our organization will reach to new heights of success. III. THE PRISONERS DILEMMA GAME STRATEGY As we know there are many types of game strategy we can use and of these is the prisoners dilemma game strategy. Most of the work in game theory is done on the basis of this strategy. This strategy tell us how we can manage balance in mainly three things in the organization, first is it can help us to manage cooperation on different levels of organization same it also work for managing completeness and competition with business and other organization. This strategy is also helpful to the organization to manage relation with the employees and as well as other organizations. Suppose there are two multinational companies who are trying to make control over the market and also trying to attract as much customer as much they can for that they first try low price strategy soon enough other company feels that s that they are losing control in market then they also reduce the price of goods in the market. Sometimes both companies make some adjustment between them and then decide same price for their IJIRT INTERNATIONAL JOURNAL OF INNOVATIVE RESEARCH IN TECHNOLOGY 67

3 similar product and they mutually earn good profit but sometimes a company give less price and better quality of the product which will reduce the profit of the other organization in the market and because of that these company will face lose and one company will earn profit from it. In first situation both company will earn profit from but not much. In second situation first company will take all the profit and second company face loss. When both company cooperate with each other they both cheating with their clients but they are also making profit from them. Example there is two players P1 and P2, both have two possible actions confess and don t confess. Now players choosing their action without knowing that what action is taken by other player. If 1. Both don t confess get 1 year prison. 2. Both confess then both get 5 year prison. 3. If one confesses then other will be free and other gets 15 year prison. Less years=greater satisfaction=>higher payoff, P1 payoff first, followed by P2 payoff. Don t Confess Confess Don t Confess 1,1 15,0 Confess 0,15 5,5 Table 1.1 : prisoner s dilemma in strategic form IV. ORGANIZATION BEHAVIOR AND GAME THEORY In this world many kind of people are living, everyone has their own thought process and think differently same as if many different type of thinker will work together in an organization then which type of organization has no one can even think about it so if we want to know how a organization will work and its thought process then we need to understand first how a normal person thinks. To understand organization behavior we need to understand people thinking or we can say that we need to understand how a human being behaves in different situation and environment. When a person change the way of doing tasks then the new way of working also effect other people thinking and payoffs. Prisoner s strategy is a strategy which can be applied in any situation and also every living organism. If an organization can influence other strategically then it means this organization have some kind of hold over the other organization. Game theory helps us to understand behavior of the organization. There are many types of studies in this world many of them are using game theory as a tool successfully but with some limitations. According to the work done in study, what I understand by all this i. e. that everything which an executive support system will return as an output all the things will depends on the input. If invalid data is inserted into the system that means data inserted by us is insufficient and because of this reason software is not able to give correct result that means software is giving us wrong results. So we need to fill all the data into the system and in this way people will get correct information from the system. One more thing is necessary and that is in case, if account is entering all the data which we have to input to the system but all the employees are not giving there feedback that means all the data which is inserted in to the system from some department is complete but from other department data is even not started coming yet that means we need every information on the system so our system can perform better than other organization and we make good profit for the company. So by all the details tells us that game theory help and give is a well designed framework which show us way to get success and its all depends on our way of working that all the things will work properly. The prediction which we are going to make to save resources and time of the organization we can prove IJIRT INTERNATIONAL JOURNAL OF INNOVATIVE RESEARCH IN TECHNOLOGY 68

4 them theoretically and by systematically done tests. We assume that we testing our subject with as many different settings as much as we can and every decision will be made on the behalf of which data they inserted and on the basis of their individual behavior. It is impossible to ask every person to do his best everything as it depends on many constraints. All the things we are trying to do is just so as to increase the outcome to its maximum level according to their properties. The people who are induced in research are suppose to take decision according to designed system based on decision theory created by us. It s also important that they have compatibility with their consistency and error of performance. The outcome of this theory gives accurate results on the business with different types of conditions. In case of different type of businesses game theory gives many new properties which we are ignoring while applying it on other organizations that means if we covered those properties then it may be possible that we get much more accuracy in our results. The major result of all this study is that as much accurate information and data we collect and put into the system; system is able to give much more accurate information and cover up as much as different situation also with it. In case game theory is able to process all this highly hypothetical data with many types of different algorithms. There are various algorithms in game theory. Most of the theory is developed for a particular situation but these theories also work with many kind of situation also. If we take an example, graph theory was develop hundred years ago for a particular situation but today it is being used in many different fields like networking, traffic control, train services, air traffic control, war etc. combinations to solve a problem. All these strategies help us to generalize the use of the game theory in our daily life. In this paper we are applying game theory on the executive support system. As we applied different situation on different people, we found that every person take decision differently and most of the time their decisions are interdependent. Using behavior game theory we build a system which has layer by layer adding to the old design and trying to make it perform better. Each layer helps to make correction in the original model. V. USE GAME THEORY IN ESS All the decisions are not always independent. In most of the cases decisions are dependent on the other people how they will perform and their way of thinking. Game theory is capable of predicting to us that how many decision a person can take independently. The outcome of all this research is that we get more and more different algorithms for different situation and now we are able to solve them and evaluate them in much better way. Game theory is not a study which we do correct our algorithms it s a way to develop algorithms. The equilibrium concept rule defines that the concept of equilibrium is depended on each player s strategic VI. CONCLUSION As we know that every organization s have to take some risky decision to gain profit. While the organizations have to make decisions against its competitor, many IJIRT INTERNATIONAL JOURNAL OF INNOVATIVE RESEARCH IN TECHNOLOGY 69

5 decisions involving large sum of money. Decisions impacting the organization as whole cannot be taken in hurry. There is a separate team which helps in decision making, also understand the details of the systems outcomes and on this company s future completely depends, help in the development and growth of the company. It helps us to take good decision and also save or time and valuable money to develop a system. Using this system we are trying to convert people knowledge into the working system. By this system we can use the knowledge of other organization and also use them in our organization and know-how it helps businesses bring products to markets. The diagram shows how material is flowing in the system and how a physical data flowing and knowledge will flow like techniques which connect all the parts of an organization together. When there is no internet, the organization at that time in supply chain management felt inefficient communication and allocation. ESS can be used in many different ways and many different contexts. It is helpful to every organization is to improve performance The competitive value of knowledge is really high because it s also helpful in developing right and useful information. As an organization we gave preference to the social problems and issue. So they don t make any negative effects on our business work and initiatives. We also need an environment where we can work co-operatively so we can promote learning and new research. REFERENCES [1] Alhashmi, Saadat, Knowledge Management for Business Performance Improvement. [2] [8] Goldsmith, Jack Landman and Posner, Eric A., A Theory of Customary International Law (November 1998). University of Chicago Law School, John M. Olin Law & Economics Working Paper No. 63. [3] Jensen, Michael C. and Meckling, William H., The Nature of Man (July 1, 1994). Michael C. Jensen, FOUNDATIONS OF ORGANIZATIONAL STRATEGY, Harvard University Press, 1998; Journal of Applied Corporate Finance, Vol. 7, No. 2, pp. 4-19, Summer [4] Kohn, Nina A. and Blumenthal, Jeremy A. and Campbell, Amy T., Supported Decision-Making: A Viable Alternative to Guardianship? (April 29, 2013). Penn State Law Review, Vol. 117, No. 4, [5] Law, David S., A Theory of Judicial Power and Judicial Review (December 20, 2008). Georgetown Law Journal, Vol. 97, p. 723, 2009; San Diego Legal Studies Paper No ; Washington U. School of Law Working Paper No [6] Post, Thierry and Van den Assem, Martijn J. and Baltussen, Guido and Thaler, Richard H., Deal or No Deal? Decision Making under Risk in a Large-Payoff Game Show (February 20, 2012). American Economic Review, Vol. 98, No. 1, pp , March IJIRT INTERNATIONAL JOURNAL OF INNOVATIVE RESEARCH IN TECHNOLOGY 70