Game Theory In U.S Airlines Industry Report Samples

The concept of game theory lies on the idea of the model of rational actor beyond the restraining incarcerate in the traditional realist view of the complicated world where in the concern of an individual is less entirely with issue of conflict and as much with the issues arise from cooperation. The idea cooperation in game theory where individual with shared interest act together in attaining the common goals, also every player in game theory is rational decision maker (minimize losses and maximize gains) and intelligent. The cooperative actions of the players are the effects of the process of agreement among the players, in this agreement among players entails bargaining approach that pleases the same personal interest and maximization of gains in any given game situation. The strategic form of cooperation is based on the concept of ‘zero sum game’ (Lianju et al 2011; Myerson, 2013; Shubik 2011). The Game Theory is not only used in political sector both global and local, but also on economic sector. We will be utilizing the Game Theory in the United States Airline Industry. The maximize gains and utilization play significant roles in the airline industry. Given that every airlines want to maximize gains – acquiring huge number of passengers through competitive pricing strategies of low cost airline. The competition among airlines emphasizes the requirements for success in the game business and rational decision making. Price is a weapon of the U.S airlines to compete in the aviation industry and it is also considered to be a strategic method for financial control. In addition, pricing strategy is an effective method for the survival of a company. Even though most of the offerings of a certain airline are similar to another, the only difference is the level of aggressiveness of the pricing. Thus, some passengers switch to another airline (Mohayidin et al n.d; Sengpoh 2015; Uslay 2005).

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