Maybe I’m partial to this book because I purchased it at a bookstore in Bratislava. More likely, the reason why I liked it is because a coworker told me he was interested in business strategy; and I saw this one on a bookstore 2 days later and I thought I could use a brush up on business strategy as well.
I wasn’t sure what to expect, since I hadn’t ever read about game theory, but the topics in The Art of Strategy were interesting. This book is mostly about staying 1, 2, or 3 steps ahead of your competitors. I’ve read a lot in the Behavioral Economics genre, so I like books that make you think about problems in a way you hadn’t ever thought of before. It turns out that the Behavioral Economics genre may have actually developed from Game Theory. In my own words, Game Theory is simply the study of how to make the best moves in business and life. This encompasses staying ahead of competitors and drives strategic thinking in the business world.
For example, one of the coolest examples that I remember is: Is a “We Will Beat or Match our Competitors Prices” policy better, or worse for the customer? It turns out it is worse. By creating this policy, all of the competition can raise their prices on all items, then discount select items for promotional purposes. If someone prefers store A, where something is at store B, they may ask price match store B. Store A is still coming out way ahead of Store B though, who is offering the discount to every client, because Store A’s clients can stay loyal and still get a price match. Altogether, Store A gets to increase client confidence and doesn’t have to offer the discount to every client. This decreases the incentive to offer promotions, meaning prices in the global marketplace rise. The person who is hurt is the consumer. Who would have guessed!? (A game theorist would have guessed)
Altogether, the book is pretty math intensive, so I wouldn’t recommend it to everyone. It does make some concepts difficult to understand. Lots of newer books put the same results into layman’s terms. If you’re looking for a book which is applicable to your business, this will be good for you. Just be aware that you may have to get through some math/charts/graphs and some convoluted topics, in order to process the gems of advice.
Want to read more? Check out Greg’s Life Goals, Table of Contents.
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