Game and Decision Theory Applied to Business, Economy and Finance

A special issue of Mathematics (ISSN 2227-7390). This special issue belongs to the section "Computational and Applied Mathematics".

Deadline for manuscript submissions: 30 June 2024 | Viewed by 4547

Special Issue Editor


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Laboratory of Applied Neurosciences, University of Saint Joseph, 14-17 Estr. Marginal da Ilha Verde, Macau 999078, China
Interests: applied mathematics; game theory; data analysis; quantum finance; machine learning; deep learning
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Special Issue Information

Dear Colleagues,

Game theory is the branch of Mathematics dedicated to the design of models able to make predictions, under the assumption that the agents under interaction (negotiation) are rational. Game theory can be applied to several different research fields, including computer and social science. It has been applied in business, financial decisions, presidential elections, jury decisions in trials and biology in general. The origin of game theory came out from the necessity of taking logical decisions inside conflicts and negotiations when several possible choices emerge. Within game theory, the information available for each player is crucial for making decisions.

The purpose of this special issue is to contribute papers applying game theory to the industry, business, economy and finance in general. Alternative contributions focusing on other areas might be also considered. Models based on decision trees, machine learning and others are also welcome.

Dr. Ivan Arraut
Guest Editor

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Keywords

  • game theory
  • decision making
  • rationality
  • mathematical modeling optimization
  • optimal control
  • machine learning

Published Papers (4 papers)

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Research

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16 pages, 518 KiB  
Article
Insider Trading with Semi-Informed Traders and Information Sharing: The Stackelberg Game
by Wassim Daher, Fida Karam and Naveed Ahmed
Mathematics 2023, 11(22), 4580; https://doi.org/10.3390/math11224580 - 8 Nov 2023
Viewed by 860
Abstract
This paper presents a financial Stackelberg game model with two partially informed risk neutral insiders. Each insider receives a private signal about the stock value and competes with the other insider under a Stackelberg setting. Linear strategies for the game’s participants are considered [...] Read more.
This paper presents a financial Stackelberg game model with two partially informed risk neutral insiders. Each insider receives a private signal about the stock value and competes with the other insider under a Stackelberg setting. Linear strategies for the game’s participants are considered and normal distributions for the fundamentals are assumed. Based on the Stackelberg game and the Backward Induction theory, the unique linear equilibrium is characterized. The findings reveal that the level of partial information might increase/decrease the insiders’ profits as well as the market parameter in the Stackelberg setting relative to the Cournot setting. Additionally, this paper considers the information sharing scenario between the two insiders competing in this Stackelberg game. The results show that multiple equilibria exist in contrast to the information sharing scenario in the Cournot game where the Nash equilibrium is unique. Full article
(This article belongs to the Special Issue Game and Decision Theory Applied to Business, Economy and Finance)
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24 pages, 8196 KiB  
Article
Dynamic Game Analysis on Cooperative Advertising Strategy in a Manufacturer-Led Supply Chain with Risk Aversion
by Jia Liu and Cuixia Li
Mathematics 2023, 11(3), 512; https://doi.org/10.3390/math11030512 - 18 Jan 2023
Cited by 1 | Viewed by 1208
Abstract
This paper considers a dynamic Stackelberg game model for a manufacturer-led supply chain with risk aversion. Cooperative advertising strategy is applied to the marketing decisions of supply chain participants. Based on Stackelberg game and system dynamic theory, the game and complex dynamical behaviors [...] Read more.
This paper considers a dynamic Stackelberg game model for a manufacturer-led supply chain with risk aversion. Cooperative advertising strategy is applied to the marketing decisions of supply chain participants. Based on Stackelberg game and system dynamic theory, the game and complex dynamical behaviors are studied through the use of several methods, such as the stability region of the system, bifurcation diagram, attractor diagram, and the largest Lyapunov exponent diagram. The expected utilities of participants are given and compared by numerical simulation. The results illustrate that a series of variations in adjustment speed of advertising expenditure, participation rate of local advertising expenditure by manufacturer, risk tolerance levels, and the effect coefficient of advertising expenditure may cause a loss of stability to the system and evolve into chaos. Meanwhile, the Nash equilibrium point and the expected utility of the manufacturer and retailer will change greatly. The parameter control method is further applied to control the chaos phenomenon of the system effectively. By means of analyzing the impact of relevant factors on the game model, the manufacturer and retailer can make optimal strategy decisions in the supply chain competition. The findings of this study mainly include the following three aspects. Firstly, for market stability and maximizing revenue, the manufacturer adjusts the participation rate appropriately, avoiding too high or too low values. Secondly, the manufacturer will try to reduce their own risk tolerance level for the economic revenue, and the retailer appropriately adjust the risk tolerance level to adapt to their own development according to their own enterprise strategy. Finally, both the manufacturer and retailer reduce their own effect coefficients of advertising expenditure. Meanwhile, they will attempt to increase their opponent’s effect coefficient to gain the most revenue. The research results of this study can provide important reference for the advertising expenditure decision and revenue maximization of participants in the context of risk aversion. Full article
(This article belongs to the Special Issue Game and Decision Theory Applied to Business, Economy and Finance)
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29 pages, 3421 KiB  
Article
Implications of CSR Practices for a Development Supply Chain in Alleviating Farmers’ Poverty
by Qingyu Zhang and Tianlong Luo
Mathematics 2022, 10(20), 3762; https://doi.org/10.3390/math10203762 - 12 Oct 2022
Cited by 1 | Viewed by 1150
Abstract
To alleviate farmer poverty, this paper investigates the effect of a retailer’s different socially responsible practices on a two-echelon supply chain consisting of one rural (poor) farmer, one suburban farmer, and one common retailer. Different from a commercial supply chain (whose members’ objectives [...] Read more.
To alleviate farmer poverty, this paper investigates the effect of a retailer’s different socially responsible practices on a two-echelon supply chain consisting of one rural (poor) farmer, one suburban farmer, and one common retailer. Different from a commercial supply chain (whose members’ objectives are to maximize their profits) and a humanitarian supply chain (whose objective is to save more people, rather than to prioritize profits), the paper aims to study a development supply chain where the CSR-conscious retailer aims to lift the poor farmer out of poverty through cost sharing, altruistic practices, or fairness practices. Can the CSR-conscious retailer (and the development supply chain) do well by doing good? To answer the above question, four models of potential CSR investment are established and analyzed. Considering the different influences of the retailer’s CSR practices, this paper uses a Stackelberg game to analyze the decisions and profits of the farmers and the retailer in these four models. Our study finds that, first, the retailer’s CSR practices can improve the whole supply chain’s performance, which means that the supply chain has the potential to achieve the Pareto improvement for both the farmers and the retailer. Second, the retailer’s CSR practices yield benefits while implementing cost-sharing or fairness practices. Third, the rural farmer always benefits from the retailer’s CSR practices and may prefer the altruistic practice from which they can benefit the most. In addition, to benefit their profit more, the rural farmer should grow high- or low-value-added crops rather than medium-value-added ones. Fourth, from the suburban farmer’s perspective, the retailer’s CSR practices are not beneficial for their performance. However, the extent to which the suburban farmer’s performance decreases is much lower than the extent to which the rural farmer’s performance improves. The results of this paper might be used by stakeholders to alleviate poverty. Full article
(This article belongs to the Special Issue Game and Decision Theory Applied to Business, Economy and Finance)
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Review

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14 pages, 372 KiB  
Review
Revenue Management in Airlines and External Factors Affecting Decisions: The Harmonic Oscillator Model
by Ivan Arraut, Wilson Rosado and Victor Leong
Mathematics 2024, 12(6), 847; https://doi.org/10.3390/math12060847 - 14 Mar 2024
Viewed by 636
Abstract
The Revenue Management (RM) problem in airlines for a fixed capacity, single resource and two classes has been solved before by using a standard formalism. In this paper we propose a model for RM by using the semi-classical approach of the Quantum Harmonic [...] Read more.
The Revenue Management (RM) problem in airlines for a fixed capacity, single resource and two classes has been solved before by using a standard formalism. In this paper we propose a model for RM by using the semi-classical approach of the Quantum Harmonic Oscillator. We then extend the model to include external factors affecting the people’s decisions, particularly those where collective decisions emerge. Full article
(This article belongs to the Special Issue Game and Decision Theory Applied to Business, Economy and Finance)
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