How do you test and validate your game theory assumptions and predictions?

1 Experiment with scenarios

One way to test and validate your game theory assumptions and predictions is to experiment with different scenarios and see how they affect the outcomes and payoffs of the game. You can use software tools, simulations, or spreadsheet models to create and analyze various scenarios, such as changing the number of players, the information available, the actions possible, the costs and benefits, or the rules of the game. By experimenting with scenarios, you can check the sensitivity and robustness of your game theory models, as well as identify potential risks and opportunities.

2 Collect and analyze data

Another way to test and validate your game theory assumptions and predictions is to collect and analyze data from the actual or similar markets where the game is played. You can use sources such as surveys, interviews, focus groups, observations, or historical records to gather data on the behavior, preferences, and beliefs of the players involved. You can also use techniques such as regression analysis, cluster analysis, or factor analysis to find patterns, correlations, or causations in the data. By collecting and analyzing data, you can validate or invalidate your game theory assumptions and predictions, as well as refine or revise them based on the evidence.

3 Compare with benchmarks

A third way to test and validate your game theory assumptions and predictions is to compare them with benchmarks from other sources, such as industry standards, best practices, or academic research. You can use benchmarks to evaluate the validity and reliability of your game theory models, as well as to identify gaps or discrepancies. For example, you can compare your game theory predictions with the actual outcomes or performance indicators of the market, or with the recommendations or results of other game theory models or studies. By comparing with benchmarks, you can verify or challenge your game theory assumptions and predictions, as well as learn from other perspectives or experiences.

4 Seek feedback and input

A fourth way to test and validate your game theory assumptions and predictions is to seek feedback and input from other stakeholders, such as experts, peers, or customers. You can use methods such as brainstorming, consulting, or testing to solicit feedback and input from others who have relevant knowledge, experience, or interest in the game. You can also use tools such as surveys, polls, or ratings to measure the satisfaction, acceptance, or preference of the players involved. By seeking feedback and input, you can improve or enhance your game theory assumptions and predictions, as well as build trust and rapport with the players.

5 Monitor and update

A fifth way to test and validate your game theory assumptions and predictions is to monitor and update them regularly based on the changes and dynamics of the game. You can use metrics such as key performance indicators, market share, or profitability to monitor the outcomes and payoffs of the game. You can also use methods such as environmental scanning, trend analysis, or scenario planning to anticipate and respond to the changes and uncertainties of the game. By monitoring and updating your game theory assumptions and predictions, you can adapt or optimize your game theory models, as well as avoid or mitigate potential pitfalls or threats.

6 Test and validate your game theory assumptions and predictions

Testing and validating your game theory assumptions and predictions is essential for applying game theory to pricing analysis effectively and efficiently. By using these methods and best practices, you can ensure that your game theory models are accurate and reliable, as well as aligned with your goals and strategies. Testing and validating your game theory assumptions and predictions can also help you gain insights, advantages, or opportunities in the competitive and complex markets where you play the game.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?