Tata Steel’s acquisition of Corus shows how coordinated strategies can yield greater benefits even in a competitive marketplace. The strategic fit of Corus’s range of high-end products and know-how, and its access to developed markets, combined with Tata’s low-cost access to ore, efficient basic steel production, and its own market access certainly provide a solid starting point. What they have done is breaking out of the self-limiting constraints of non-cooperative reasoning that actually ends up being suboptimal. Instead, a coordinated solution through collaboration has led to the potential for greater gains for both.
Here is Shyam Ponappa’s detailed article in Business Standard
Related links
Roger McCain on Game theory
Wikipedia on Game theory
On Hamada diagram (.pdf file)