Asymmetric roles for decision-makers in conflicts with business applications

Some power concepts based on non-cooperative game theory are compared and used to analyze strategic interactions among decision-makers with asymmetric roles. The power definitions that are summarized, categorized, and compared here include hierarchical power, staying power, holding power, threat power, and moving power. All of these definitions focus on the rules of play, rather than the structure of the model, to capture the asymmetry of the players’ positions. Comparisons using representative games confirm that power concepts provide a new set of informative techniques for analysing conflicts within hierarchical systems of decision-makers. The power concepts are especially useful in business competition where the arrangement of firms in a hierarchy (like price leader/follower) may significantly affect decisions and outcomes in a conflict.