A fundamental premise of ________ theory is that when making decisions, managers need to think in two related ways. First, they need to look forward and anticipate how rivals will respond to their competitive moves and second, managers need to reason backward to determine which moves their company should pursue today given their assessment of how their rivals will respond to various future moves.
A) transaction cost
B) game
C) population ecology
D) institutional

Question

Quizplus · Accepted Answer

The premise described in the question is a key aspect of game theory, which focuses on strategic decision-making in competitive environments. Transaction cost theory is concerned with the costs associated with economic transactions, population ecology theory is focused on the dynamics of organizational populations in an environment, and institutional theory is focused on the norms and rules that guide organizational behavior. None of these theories specifically address the forward-thinking and backward-reasoning elements inherent in game theory.

A Fundamental Premise of ________ Theory Is That When Making