One type of “gaming” behavior that takes place quite often in the business world is called revenue management. If you offer a certain product or service, how can you tweak the prices, promotions, or availability in a way that maximizes your profit? The analysis for such a situation is called decision theory.
Decision theory refers to a set of methodologies based on expected values, maximin, and related criteria that are used to select the best alternative when a decision maker is faced with uncertainty.
Suppose you are an airline executive tasked with the job of analyzing a particular flight ...