I have seen at first hand more companies than I care to mention try to destroy the competition and in the process bring themselves down,' says Nalebuff, who teaches at the Yale School of Management.
Examples abound of aggressive strategies that backfire.
Lowering prices in a bid to gain market share often prompts competitors to match the cuts to regain their lost share. That simply restores the status quo, but at lower prices, leaving everyone worse off. Brandenburger and Nalebuff do not deny that conflict plays an important role in business. Their message is simply that, in developing strategy, companies should weigh up the consequences of co-operative and competitive behaviour. That is a task well suited to game theory, a branch of applied mathematics providing a systematic way to develop strategies when one person's fortune depends on what other people do.