Game theory and operations management

Abstract

A firm is more than a black box production function described by its labor and capital inputs. Firms have capacity constraints that lead to inventory, shortages, queues and markdown prices. Consumers are aware of these messy details and they respond accordingly and strategically. Recent research in operations management, using tools from game theory, has concentrated on how such operational realities influence the dynamics of competition among firms. This talk will survey results from this literature and discuss opportunities for future directions.