@rgumental @dvisor

John Nash died last week. Someone asked me about the significance of his work and the so-called Nash Equilibrium & Game Theory which won him the Nobel Prize. It made me think a while.  Lot of economic theories are just theories with very little practical applications. Is this game theory like that ?  Much of the geo-political situations , competitive decisions in many industries can be modeled by applying game theory principles. If you model the problem correctly, this can give you pretty good insights into your competitor's strategy & give a lot of structure & logic to your decision making . I could think of no better example than the looming possibility of Greek default & subsequent exit that media has labelled as the Grexit question But before that, how do you translate / model a problem into a Game Theory situation where we can apply the Nash Equilibrium principles . I stumbled upon a structured approach  illustrated very well here   ...

 I'm a great fan of Carrefour Loyalty programs scheme here in UAE. I think Indian retailers ought to learn a thing or two from the way they have designed it, purely from a perspective of maximizing long term profit .. I haven't seen anything close-by to the way this operates - may be its there in the developed markets of West. Carrefour operates this loyalty points scheme - for every purchase, you accumulate varying number of points depending on the items that you buy. Once you reach 500 points, you get a 50 AED voucher.  There are two kinds of underlying point boosting schemes -  on certain days there are things like extra points / double points thats available to anyone who buys certain products  . These are presumably linked to Inventory clearing items.  So, sometimes, you get extra points for buying washing liquid , sometimes for biscuits etc.  Why I feel this is linked to inventory clearing  -  These items are usually set at the start of t...