Game Theoretic Analysis of the Competition among Global System for Mobile Communications (GSM) Firms in Nigeria

Abstract

The study critically examines how the Global System for Mobile Communication (GSM) firms determine the optimal strategy from television and radio advertisements given that each firm seeks to gain the largest market share. The methodology used involved a Game Theoretic approach and linear programming. The result of the analysis showed that for MTN to maintain its position as the leader in the industry, it should invest 0% of its NM in Television Advertisement and 100% in Radio Advertisement when competing with Airtel, Globacom and Etisalat. This will yield a pay-off of N9M billion. Findings also revealed that for Globacom to gain the largest market share in the industry, it should invest 0% of her ₦N in Television Advertisement and 100% in Radio

Advertisement when competing with MTN. This will produce a benefit of N9N billion. The results also showed the optimal resource allocations for Airtel and Globacom for each firm to gain the largest market share in the industry when competing with MTN. Findings also revealed the pay-offs for both firms when they compete with MTN. It is therefore recommended that Nigerian GSM firms use Game Theory in optimizing resource allocation between strategies.