A Game-Based Study Of Architectural Enterprises' Optimal Management

With the improvement of China's macro economy and the increase of fixed assets investment, Chinese architectural design industry has developed fast in recent years, while the prospect of it is not promising considering the macro economic situations, competition degree and marketing environment. Low-level management and weak competitiveness are widespread in architectural design enterprises. The major problems of them are poor team cooperation, insufficient incentive for managers, inefficient knowledge sharing and brain drain. This thesis aims to solve the above problems so as to improve corporate management and quality to make architectural design enterprises to continue developing in adverse conditions.Game theory studies strategic interactions between intelligent rational decision-makers and studies the equilibrium of their strategies. It is an analytical method through mathematical construction models. Game theory was advanced in 1940s, and since then it has been developing fast and has played an important role in mainstream economics. There have been five Nobel Economics Prizes awarded to the researchers in game theory. It is widely and successfully used in economy, management, politics, military affairs, etc., which are all concerning competition and cooperation. Game theory is of great importance in guiding enterprise managers.The advantages of adopting game theory to analyze the strategies are as follow: it is a powerful tool for analyzing the actions of the self-interested agents who strive to maximize their payoffs, for analyzing the strategies of those interdependent agents and the equilibrium of their strategies. It adopts mathematics and logic in its analysis so that the results are much rigorous and scientific.This thesis tries to solve the four problems of team cooperation, incentive for managers, knowledge sharing and brain drain by constructing separate mathematical models for each problem based on game theory. This thesis analyzes the reasons to cause the four problems, finds the balance between enterprises and its employees in pursuing their maximal payoffs, analyzes the conditions for realizing equilibrium in every field, and then makes suggestions on how to solve the existing problems.In order to solve the problem of team cooperation, this thesis constructs a game payoff matrix when two members of a group cooperate, the result of which shows that their dominant strategy is non-cooperation in a static game of complete information; that in limited times repeated games of complete information, their dominant strategy is still non-cooperation. Thus, a KMRW reputation mode of repeated games of incomplete information is introduced. Through the analysis of the game process, it can be concluded that a strategy exists which forms a perfect Bayesian equilibrium when the number of games are large enough. The conclusion also shows that if members are fixed in a certain group, it is better to use team cooperation incentive method to encourage group members to cooperate.In order to solve the problem of the incentive for managers, this thesis constructs a dynamic game with two stages to work out the conditions for realizing the Nash equilibrium when trigger strategies of both parties are given. The output of managers'hard working minus the negative effect of his hard working should not be less than his income after job-hipping (opportunity cost) plus a certain proportion of negative effect and discount factors which are based on how hard he works, and plus the continuation of high output probability if he doesn't work hard. This condition is essential for making managers'salary incentive system effective. In order to inspire its managers and at the same time to restrict its managers'salary to a certain extent, enterprises should construct a promising prospect to make managers think a lot of their future profits and to promote the supervision on managers.In order to solve the problem of brain drain, this thesis constructs a game model of"hard-working—recognition"for talents and enterprises. When the trigger strategies of two parties are given, infinite repeated static game realizes Nash equilibrium and the maximization of the overall efficiency. The realization of this equilibrium depends on the value of discount rate.In order to solve the problem of knowledge sharing, this thesis adopts the method of evolutionary game analysis and discusses the trend and speed of the realization of the equilibrium. The original model is modified based on the above discussion. By evolutionary game analysis, it can be safely concluded that information sharing can be realized through the modified model.Game theory and models adopted in this thesis draw on the research achievements of their predecessors. This thesis focuses on different issues in construction enterprise's management, and selects proper theory and models to optimize management analysis. Therefore, the conclusion not only accords with general principles of management but also accords with the actual situation of construction enterprise, and have a certain guide for optimal management of construction enterprise.