Game Theory & Stakeholder Psychology

In key industries certain dominant multinationals behave as a cartel, seeking to block new entrants to their market niche. The most deeply entrenched companies in Russia, Libya, and the US do not necessarily seek to increase their profit margins nor find new business opportunities. Rather, they prioritise obscuring transparency and protecting their ensconced fiefdoms. Decision-makers at top global firms in ‘old school industries’, like oil or security, act according to ‘incumbent psychology’, fearing change and seeking to block new entrants. This goes against received wisdom suggesting that the primary danger of public companies' quests to increase shareholder value inherently stems from the ‘problem of the commons’. Companies' ‘rational’ pursuit of profit puts them at odds with larger public goals, like protecting the environment. This stakeholder psychology and larger applications of game theory unveil our era of disorder and showcase the necessity for solutions to break these business models to promote collective action and cooperation.

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