Game Theory is a set of tools and techniques for decisions under uncertainty involving two or more intelligent opponents in which each opponent aspires to optimize his own decision at the expense of the other opponents.

1. GAME THEORY IN SALARY NEGOTIATION
PRESENTED BY – KF
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2. GAME THEORY
 Game Theory is a set of tools and
techniques for decisions under uncertainty
involving two or more intelligent opponents
in which each opponent aspires to optimize
his own decision at the expense of the other
opponents.
 In game theory, an opponent is referred to
as player.
 Each player has a number of choices, finite
or infinite, called strategies.
Reference:- https://www.slideshare.net/benghuid/game-theory-6705811
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3. GAMETHEORYIN SALARYNEGOTIATION
Scenario 1
 All the possible outcomes in the case of
the recruiter getting to change his/her
stance after seeing the applicant’s stance
(this simulates an example where the
applicant gives a number first)
 The applicant only gets the high
salary 25% of the time.
Applicant’s Expectations
Company’s Expectations
Low High
Low Job & 😞 Job & 😞*
High No Job & 😞 Job & 😀
Reference :- https://blogs.cornell.edu/info2040/2014/09/28/using-game-theory-for-salary-negotiation/
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4. GAMETHEORYIN SALARYNEGOTIATION
Scenario 2
Company’s Expectations Applicant’s Expectations
Low High
Low Job & 😞 Job & 😞*
High Job & 😀* Job & 😀
 All the possible outcomes in the case of
the applicant getting to change his/her
stance after seeing the recruiter`s stance
(this simulates an example where the
recruiter gives a number first).
 When the company is the first to give a
number, you always get the job, and you
have a 50% chance of getting a high
salary.
Reference :- https://blogs.cornell.edu/info2040/2014/09/28/using-game-theory-for-salary-negotiation/
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5. CONCLUSION
Therefore, from what we observe in
the two game scenarios above, we
learn that when the company is the
first to give a number, the applicant
has twice the chance of getting the
job with a high salary. This can be
generalized to any negotiation in
that the first party to express their
stance usually stands at a
disadvantage.
Reference :- https://blogs.cornell.edu/info2040/2014/09/28/using-game-theory-for-salary-negotiation/
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6. THANK YOU
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