A simulated contrastive study of attack-defend-retreat-based versus game-theory-based strategic decision models

This study investigates the relative performance of two different strategy models in a simulated business environment. The business simulation developed for this study consists of five markets and two firms each utilizing a different strategy model to make decisions within the markets regarding their products. The business simulation and strategy models are developed using a combination of Microsoft Visual Basic and Microsoft Excel programming tools and techniques. Strategic decision models based on O'Bannon's Attack Defend Retreat Theory and on the application of two-person zero-sum competitive game theory techniques are implemented in the business simulation. The two firms within the simulation virtually compete with each other in the five markets using the aforementioned strategy models. Resulting firm performance in the business simulation is evaluated in terms of net present value of firm profit and resources used. Statistically significant differences in performance between the results generated by the two decision models are observed and discussed.