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Introduction Since in 1994 John Nash John Harsanyi and Reinhard Selten were awarded the Nobel Prize in Economics Crainer 1996 business people had started to apply the game theory in the business strategy Some people argued that game theory is well established theory but it is too hard to use in developing and implementing international business strategy In the authors opinion even though game theory has some demerits to apply in the international business strategy it is still contributed to the international business strategy This paper will introduce the game theory briefly describe some disadvantages of game theory to apply in the international business strategy and then discuss why game theory can develop and implement international business strategy to support authors argument Game theory In simple terms it is a set of complex mathematical formulae that shows how decisions affect each other by offering a comprehensive explanation of how interdependent individuals corporations and governments make strategic choices Murdoch 1999 In the business discipline game theory deals with how to cooperate and compete with customers suppliers complementors and substitutors with profound consideration Why game theory is hard to use in international business strategy Game theory is based on some hypotheses but in reality maybe the conditions of games dont match the hypotheses For instances game theory assumes all players are rational and believe others are rational De Wit and Meyer 1998 It is almost impossible in every occasion of business game Additionally as the number of players increases the model of game theory becomes more complicated According to Crainer 1996 game theory is most effective in the scenarios where there are only limited players and players behave in rational ways This can explain why members of Cartel show excessively interest to use game theory Besides in game theory the models depending on the mathematics and computing exclude some executives to understand the implications Finally in the broader dynamic international community compared
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