The Role of Game Theory in Decision Making Process: Palestinian Oligopoly Companies as a Case study رسالة ماجستير

Abstract

This study aims to highlight the importance of using game theory as a mathematical tool in decision making in the Palestinian oligopolistic market - the telecommunications sector, as it gives more accurate results than the other decision making mechanisms used, and this necessarily reflects positively on the profits and revenues and the share price of the company, In addition to reducing the risk that the company may suffer as a result of making a wrong decision or not based on a sound basis. This study, based on numerical data from the consolidated financial statements and the published annual reports of Jawwal and Ooredoo Palestine, demonstrates the ability of the game theory to use these numbers and to put them in a framework of a state of nature and the possibility of these cases in exploring a sound strategic decision that reduces profit and risk. The study answered a set of questions about the Palestinian telecommunication oligopoly market, as well as questions related to the game theory, such as its definition, its derivatives, its development and its divisions, and what is Nash equilibrium, which is the main axis of the game theory. The study used Gambit Software and DPL as accurate tools in the analysis of the game theory and the decision tree. The data obtained from those two software were obtained through the published financial statements for two consecutive years for Jawwal and Ooredoo Palestine. Four case studies common between the two companies were analyzed: the mechanisms of call pricing, investment, increase the rate of return on sales, and a case related to the Palestinian consumer in determining any offers made by the two companies achieves his utility, in this latter talk about the estimation of the total utility and marginal utility and their association with the future offers by both companies. Finally, recommendations were made to the decision makers in each of the two competing companies for the purpose of using this precise tool, and applying it in all areas that need to make a strategic decision aiming to achieve the permanent progress and development of the Palestinian telecommunications sector ,and achieve fair competition while preserving the rights of the Palestinian consumer and providing communication services to him