Analyzing Information System Investments: A Game-Theoretic Approach

Abstract

Businesses invest billions of dollars in information technology every year. Sometimes the incentive for a given investment may not be apparent when considered using traditional financial analysis methods. in this article, Game Theory and an extension, the Theory of Moves, are presented as alternative methods of modeling IT investment decisions. This technique specifically considers investments motivated by operating or competitive necessity. the modeling process is discussed and several examples from the current trade press are examined.