Marketing principles - The law of games

Classic game theorists have called out two general categories of games: Zero-sum and non zero-sum. Broadly speaking, a zero-sum game necessarily involves a win/lose transaction. Sport competitions can be viewed as zero-sum games. When one team wins it means by definition that the other team has lost. Non zero-sum games allow for the possibility that both parties can win, or both parties can lose, as a result of a transaction.

Classic free-market economic theory explains voluntary market transactions as being non zero-sum games by bringing more value to both buyer and seller at once. Classic game theory and classic economic theory have both embraced the use of mathematical modeling and analysis. These models seem to work best with easily quantifiable units, such as money or money equivalents, and where the participants are most rational. These theories find practical application in financial markets and mass marketing. It is a game of playing the odds, trusting the numbers, and measuring results. It's pure business.

Direct marketing to people, on the other hand, does not derive much benefit from the classic theories. There are many reasons for this, and the first may be the fact that marketing to people is not particularly rational.

Eric Berne's definition of interpersonal games may be more useful:

"A game is an ongoing series of complimentary ulterior transactions progressing to a well-defined predictable outcome. Descriptively it is a recurring set of transactions, often repetitious, superficially plausible, with a concealed motivation."

Being a psychiatrist, Dr. Berne was preoccupied with the examination of neurotic games, but it's hard to deny that a lot of neurotic game playing goes on in marketing, human resource management and customer relations.

It's a big topic.