Coevolutionary Gaming Theory Can Facilitate Decision Making

How Coevolutionary Gaming Can Facilitate Group Decision Making

Introduction:

Coevolutionary war gaming is an unconventional scenario planning process put forward by Jeff Cares and Jim Miskel in their article "Take Your Third Move First" which essentially builds on the argument that planning and subsequent decision making should not be conducted in a vacuum, i.e., it is not enough to just look at the current facts and historical data to make decisions and plans and just assume that those who will be affected (e.g., competition) will just take them sitting down. Plans and decisions made using this "vacuum" process are characteristically shortsighted at best, because they normally do not take the impact of the counterplans and actions that could possibly be taken by the affected parties into consideration.

A decision taken based on available data could turn out to be worse than just maintaining the status quo if reactionary moves are considered. A simple but good example of this is the decision of a market newcomer to implement price reductions in order to grab market share. Based on available data, it seems so simple a decision to just cut prices since this is probably what the data will say. However, this decision erroneously assumes that the market share leaders will just do nothing. What the data does not show is that the market leaders are better equipped to fight in a price war than the newcomer because of their incumbent market volume (which gives them economies of scale). The market leaders can even aggressively fight to the point where they bring down their prices below the breakeven point of the newcomer (which is normally higher) until such time that it collapses because its sales cannot support its operations. In other words, then, if this decision is taken by the newcomer (and assuming it can only last for so long without major sales), it could be more fatal for it than, for example, identifying geographic market niches to enter and build brand awareness before going into the turf