Game theory applications in shipbuilding strategy analysis

Abstract

This research work discusses application and extension of game theory in the shipbuilding industry. It answers two research questions, namely, (1) “How should a ship owner and a shipbuilder act to optimize their own payoff?”, and (2) “How can decision makers be supported with reliable information?” Literature-based research method has been selected to conduct the research. During the research process, relevant literature has been analyzed, two games were modelled, analyzed, extended and discussed. The research concluded that for the modelled situations, the decision makers can rely on the information given by game theory when the game analysis is extended with supporting methodologies or frameworks; however, it should not be considered as 100% precise, yet reasonably reliable. This is because people might make mistakes in their assumptions. The thesis consists of several principal chapters, namely, introduction and shipbuilding, extensive literature review, research methodology and two sample games, then its analysis, discussion and conclusion with limitations and future work.