Applied Game Theory, Business Economics
Our laboratory is focused on firms’ decision problems in competitive environments. To model and analyze them theoretically, we mainly use a game-theoretic approach and other economics approaches. Our current interest includes strategic network formation and competitive marketing strategies.
Principle of Economics, Mathematical Economics, Advanced Topics in Business Economics
Using the game theoretic and microeconomics approaches, we aim to provide insights into business strategies through the research projects we undertook. We necessarily have motivating examples of real-world business practices, but the analysis is conducted theoretically based on stylized mathematical models. The novel, clear, and interesting strategic implications that are difficult to obtain with other methodologies, such as case methods and empirical analysis, are required, contributing to the academic literature. In this sense, we mainly address research topics that shed light on up-to-date business models for which empirical data are not yet fully available (see Figure 1). Specific research topics include the following:
We address the game-theoretic analysis of strategic decisions related to up-to-date marketing concepts and methods associated with pricing (e.g., dynamic pricing), product design and variety (e.g., mass customization), distribution (e.g., omnichannel strategy), and advertising (e.g., in-store advertising). Even commonly accepted ways of improving profitability, such as cost reduction and quality improvement, are not necessarily beneficial for firms during competition. Theoretical results clearly explain such counterintuitive outcomes, along with the underlying logics.
Many firms, such as manufacturers, wholesalers, and retailers, are involved in providing a single product. However, each of them acts to maximize its individual profit, which often results in inefficient supply chain. Our game-theoretic analysis helps understand such phenomena and proposes solutions, such as contract schemes, to coordinate channel members.
Recently, we see remarkable alliance formations among competing firms, even across multiple industries, in the context of technology alliance, joint distribution, and so on. We theoretically investigate under which conditions such “co-opetitive” (cooperation and competitive) situation can be stably sustained, especially under a large and complex network structure.
Through our research projects, I hope that students will acquire the ability to profoundly understand firms’ interaction and obtain rich managerial insights. In business practices, data usage is necessary, but we also note that the usage would not be effective in the absence of such abilities.