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Biform Games

Stern School of Business, New York University, 44 West Fourth Street, New York, New York 10012
Graduate School of Business, Columbia University, 3022 Broadway, New York, New York 10027
adam.brandenburger{at}stern.nyu.edu
hws7{at}columbia.edu

Both noncooperative and cooperative game theory have been applied to business strategy. We propose a hybrid noncooperative-cooperative game model, which we call a biform game. This is designed to formalize the notion of business strategy as making moves to try to shape the competitive environment in a favorable way. (The noncooperative component of a biform game models the strategic moves. The cooperative component models the resulting competitive environment.) We give biform models of various well-known business strategies. We prove general results on when a business strategy, modelled as a biform game, will be efficient.

Key Words: noncooperative game; efficiency; business strategy; cooperative game
History: Received: August 26, 2004;

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