Research Paper on:
Porter's Five Forces Model and Game Theory

Unformatted Sample Text from the Research Paper:
is usually apparent on the bottom line. The need to create profit is the main driving force behind most organisations. There are also other elements that need to be considered,  such as risk. Whilst maximising income there is also the desire to reduce risk. In the prisoners dilemma there is a situation where in an industry with two companies, where,  if they co-operate they will gain three gaols coins. If only one co-operates and one cheats, the cheating company will receive 5 gold coins, and the compliant company none, if  they both cheat then they both receive one gold coin. The logic behind this is that the best scenario is to agree and  both companies to co-operate, in this way the will both gain the maximum return with the lowest level of risk. The increased profit is only available when there is cheating,  this may be seen as a better scenario for the winning company, but it is also a higher risk, as if the other company cheats then five coins will become  one. The scenario may continue in the short term where one of both companies cheat, but they eventually realise that it is easier and less risky as well as potentially  more profitable to cp-operate as they have a win win situation. There is a need for a basic level of trust, but  there is also the understanding for the way in which the competitor will behave. This can be seen as an element of game theory. Section B To ascertain the  value of game theory as a valuable tool the theory must be considered in terms of use and value. Game theory can be seen as a strategic tool. When we