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Game Theory - The Chicken Game

The chicken game refers to a risky negotiation strategy where a supplier or buyer threatens damage to the other party to obtain better terms. It should only be used in special cases where supply risk is low. To be effective, the opposing party must view the threat as credible, and the negotiator should have alternative options if the chicken game fails.

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Gourav Singhal
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423 views

Game Theory - The Chicken Game

The chicken game refers to a risky negotiation strategy where a supplier or buyer threatens damage to the other party to obtain better terms. It should only be used in special cases where supply risk is low. To be effective, the opposing party must view the threat as credible, and the negotiator should have alternative options if the chicken game fails.

Uploaded by

Gourav Singhal
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Game Theory - The Chicken Game

• A chicken game in a negotiation is when the supplier or the buyer threatens to inflict damage on the other in an attempt to get better
terms.

1
Game Theory - The Chicken Game

• Chicken is a risky strategy that should only be used in special cases.

2
Game Theory - The Chicken Game

• To predict the supplier's response it is important to understand how the opposition views you.

3
Game Theory - The Chicken Game

• The Chicken Game can work in Routine or Leverage quadrants of the Portfolio Analysis Matrix, where supply risk is low.

4
Game Theory - The Chicken Game

• The Chicken Game is not a suitable strategy in the Strategic or Bottleneck quadrants of the Portfolio Analysis Matrix where supply risk
is high.

5
Game Theory - The Chicken Game

• To make your game credible, you must demonstrate to the opposition that you are serious about the threat and only play chicken for a
strategic reason.

6
Game Theory - The Chicken Game

• Be aware that Chicken may cost you in the short term.

7
Game Theory - The Chicken Game

• If you play chicken in a negotiation, make sure you have a BATNA (Best Alternative to Negotiated Agreement).

8
Game Theory - The Chicken Game

• A Chicken Game in a negotiation is when the supplier or the buyer threatens to inflict damage on the other in an attempt to get better

terms.

• Chicken is a risky strategy that should only be used in special cases.

• To predict the supplier's response it is important to understand how the opposition views you.

• The Chicken Game can work in Routine or Leverage quadrants of the Portfolio Analysis Matrix, where supply risk is low.

• The Chicken Game is not a suitable strategy in the Strategic or Bottleneck quadrants of the Portfolio Analysis Matrix where supply risk

is high.

• To make your game credible, you must demonstrate to the opposition that you are serious about the threat and only play Chicken for a

strategic reason.

• Be aware that Chicken may cost you in the short term.

• If you play Chicken in a negotiation, make sure you have a BATNA (Best Alternative to Negotiated Agreement).

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